TGST hike bill sent to committee for review

The legislature sent by the government to raise the Tourism Goods and Services Tax (TGST) has been accepted into the Parliament.

The amendment to the GST Act is sponsored by West Maafannu MP Mohamed Mustafa Ibrahim. It as accepted into the Parliament with a majority vote of 52-7 on Tuesday afternoon.

It has now been sent to the Whole House Committee for review.

Deputy Speaker Ahmed Nazim said that he decided to sent the bill to the Whole House Committee as it is related to taxes. He said that a committee meeting will be held on Wednesday if the Parliament manages to finish all other items on the agenda on time.

The new bill will see the TGST raised from 16 percent to 17 percent starting June 1, 2025.

The government has also submitted two additional bills to seeking to double the Green Tax and raise the Airport Departure Tax and Airport Development Fee. The preliminary debate on airport taxes remains in progress.

The decision to increase tourism taxes comes after the Maldives Monetary Authority formulated new regulations earlier this month requiring all tourism revenues to be deposited to a Maldivian bank and imposing a mandatory surrender of USD for each tourist. The decision has been criticized by several top tourism officials.

Several lawmakers from the main opposition Maldivian Democratic Party (MDP) have raised concern over the potential adverse impact the tax hike could have on the tourism industry. They said that the government should first reduce its unnecessary spending before raising taxes.

However, government lawmakers claimed the tax hikes are in the best interest of the public.