Govt. holds discussion to increase state revenue; says will not increase GST and TGST


The Government was in discussions to increase the Goods and Service tax(GST) and Tourism Goods and Service Tax (TGST) on Sunday.

Ministry of Finance Communications Director Lamman Hameed stated that the government proposed raising the GST from 6 percent to 8 percent, and raising the TGST from 12 percent to 16 percent.

It was discussed to implement the change within the next six months.

Woes of the Public:
When the news of the discussion broke out, the general public expressed anger and despair over the matter.

Many criticized the discussion being held to increase tax at a time when prices of goods have been increased and promotions and overtime allowances by the govt. has stopped to decrease government’s spending.

Commenting on the issue, Ibrahim Athif Shakoor, a researcher of the Maldivian economy who also served as the head of of Maldives Monetary Authority’s (MMA) Finance Intelligence Unit, said “Taxes like GST applies to everyone equally. Therewith, if this tax is increase, the struggle of the poor will accumulate.”
He stressed that raising taxes such as GST and TGST should be considered as a last resort.
The Finance Ministry in their latest statement said that they are talking on means to increase state revenue but that it does not involve increasing the GST or Tourism Goods and Service Tax (TGST). The ministry stated that more information will be disclosed after the discussions have been concluded.

Every year’s state budget includes proposals to increase state revenue. This year’s state budget estimates that the Maldives will receive USD1.6 billion in revenue, with USD1 billion to be received from tax revenue and USD600 million from non-tax revenue. The Maldives is also expected to receive USD600 million in free aid.

GST and TGST are two great sources of income for the government. An increase in these taxes will lead to an increase in the price of goods and services.