MP Siyam criticises tax hikes, calls for govt spending cuts
He emphasised that raising taxes alone would not address the core issues.
Meedhoo MP and Maldives Development Alliance (MDA) leader Ahmed Siyam Mohammed on Wednesday expressed his opposition to proposed tax increases, advocating instead for the elimination of loss-making companies and a reduction in government spending.
His remarks were made during a parliamentary debate on the amendment to the Tourism Act, proposed by PNC MP Musthafa Hussein.
Siyam, who owns multiple resorts, argued that the issue facing the Maldives is not low taxes but inefficient spending. He noted that the Maldives is among the countries with the highest per capita tax revenue in Southeast Asia. However, he suggested that a significant portion of this revenue is being wasted.
“This country is generating revenue, and it ranks high in Southeast Asia in terms of per capita tax revenue,” he said. “But if we collect MVR 5 billion in tax revenue and end up wasting MVR 2 billion every year, increasing taxes won’t benefit anyone.”
He emphasised that raising taxes alone would not address the core issues. Instead, he urged the government to reduce its expenditures and shut down loss-making companies. Citing examples, he pointed out that last year, both MIFCO and Island Aviation incurred significant losses.
“The money is essentially being wasted,” he said, adding that these companies had together suffered losses amounting to MVR 1 billion.
“No matter how high taxes are raised, it will not benefit the public if wasteful spending continues,” he stated.
He called on members of parliament and the president to take action against what he referred to as “empty, loss-making companies.”
Siyam warned that failing to address these issues could have severe implications for future generations of the Maldives. He drew parallels with the economic challenges faced by neighbouring Sri Lanka, attributing its struggles to the mismanagement and creation of unprofitable state-owned companies.
Referring to the struggles of the tourism sector in the region, Siyam highlighted the loss Maldives faced from the Indian market, amounting to MVR 1 billion. He described the proposed tax hikes as “a temporary fix.”
“I am not opposed to taxes. But the revenue must be used properly. It should not be wasted or mismanaged. If not, the country’s future is at risk,” he said.
Siyam also questioned the current use of tax revenues, expressing dissatisfaction with the government's practice of taking on additional loans.
The proposed amendment to the Tourism Act includes a provision to double the green tax on tourists starting next year. The changes include an increase from $3 to $6 for guesthouses with fewer than 50 rooms, and an increase from $6 to $12 for resorts, city hotels, and other tourist accommodations with more than 50 rooms.
