Siyam: Increasing taxes pointless unless theft and wastage stops

Ahmed Siyam Mohamed, the president the Maldives Development Alliance (MDA) expressed concern regarding the failure to prevent the wastage of state funds on Wednesday, saying that the state already levies enough taxes, but the tax money isn’t benefiting the public because a large chunk of it is being “discarded into the ocean.”

The government has submitted legislature to double the Green Tax and increase the Tourism Goods and Services Tax (TGST), the Airport Departure Tax, and the Airport Development Fee.

During the preliminary debate on the bill on Wednesday morning, Siyam, the parliamentary representative for the Dh. Meedhoo constituency, said the Maldives already levies enough taxes. He expressed concern over the increase in taxation on “the hardworking people” over the years.

“Levying tax after tax, this country has now become one of the most heavily taxed countries in the world. This country generates revenue. This country is the wealthiest in the South East Asian region in terms of tax revenue per head,” said Siyam, the founder, chairman and managing director of the Sun Siyam Group.

Siyam said that the most important measure the country must take is to cut costs.

He said that the issue isn’t low tax rates, pointing out that the tax rates in the Maldives are already on par with that of developed countries like Singapore and the United Arab Emirates.

“Even if we increase these taxes by 10 times or even 100 or 1,000 times, there is no benefit for as long as we keep discarding USD 2 billion out of the USD 5 billion we get into the ocean,” he said.

“The most important step we need to take is to reduce our spending.”

Siyam said that all presidents who have ruled the country over the last 50 years have established multiple companies.

He said that the state suffered a loss of MVR 5 billion from the Maldives Industrial Fisheries Company (MIFCO) alone last year, while the Island Aviation Service suffered a loss of around USD 1 billion.

He described this as “discarding taxpayer money into the ocean.”

“It is of no benefit to the people no matter how much we increase taxes. What is the step we need to urgently take? Stop these criminal companies. Stop them immediately,” said Siyam, who is serving his fifth term as a member of Parliament.

“These are all companies that commit crimes. These are all companies that are committing thievery.”

Siyam said that it is high wastage of public funds that led to neighboring Sri Lanka going bankrupt. He said that the country had some 1,000 state-owned enterprises when it declared bankruptcy.

He said that the Maldives appears to be following the same path.

“We lost the entire India market around November last year. This country has suffered a loss of USD 1 billion. This is the reality,” said Siyam, whose company owns a chain of resorts.

“We had barely managed to get up after the pandemic when this additional blow landed on our feet. They didn’t realize it would smash our feet. That its not clear if we would even have our feet.”

Siyam said that he isn’t against raising the taxes, but the tax money should be properly utilized.

He said that taxpayer money should not be stolen.

“We do not have even USD 2 million in this country today. This is something we must think deeply about. Where is our tax money going? Where is it being put into? What is being done with it?” he asked.

The legislatures submitted by the government will see:

• TGST raised from 16 percent to 17 percent.
• Green Tax doubled from 3 percent to 6 percent for guesthouses and from 6 percent to 12 percent for resorts and city hotels.
• Airport Departure Tax and the Airport Development Fee raised from USD 30 to USD 50 for foreign ‘economy class’ passengers, from USD 90 to USD 120 for both local and foreign ‘business class’ passengers, from USD 90 to USD 240 for ‘first class’ passengers, and from USD 120 to USD 480 for passengers who depart of private jets.

The Finance Ministry expects the tax hikes to raise revenue by nearly MVR 3 billion.