Committee recommends GST on telecommunications services, reinstating import duties

Budget Committee of the People’s Majlis has made recommendations to the Majlis to support government proposals to introduce Goods and Services Tax (GST) on telecommunications and to reinstate import duties.

The proposals were made by the government with the budget for the coming year in an effort to increase government income.

The Budget Committee has mainly supported government’s proposals to modify the tax regime in order to increase government income, after its study of the MVR 16.9 billion budget for the next year, which is expected to run a deficit of some 2 billion Rufiyaa. The only proposal rejected by the Budget Committee was to continue Bed Tax which has been charged from tourist resort operators for a long time.

The Committee has approved proposals to increase Airport fees charged from incoming foreigners and TGST charged on tourism goods and services.

While Bed Tax levied on resorts would, as per Committee recommendations, be discontinued starting from the next year, TGST would be increased to 12 per cent, slightly less than the government’s requested rate of 15 per cent.

Although the Budget Committee approved proposals to levy tax on telecommunications services, revise import duties, and increase Airport fees charged on foreigners entering the country, the final decision to introduce them and rates of these taxes and fees would be determined only after the recommendations are approved by the Majlis after its consideration of the Budget Report.

The Budget Committee’s Report estimates that an additional sum of MVR 1.5 billion would be raised with the modifications to be newly introduced to the tax regime.