Committee rejects Green Tax hike exemption for small guesthouses
The current Tourism Act mandates a $3 daily green tax for hotels and guesthouses with over 50 rooms in residential areas.
Parliament's committee on Wednesday rejected a proposed amendment to the Tourism Act that aimed to exempt guesthouses with fewer than 25 rooms from the green tax increase.
The current Tourism Act mandates a $3 daily green tax for hotels and guesthouses with over 50 rooms in residential areas. However, the government’s new proposal seeks to increase the green tax across the board, effectively doubling the rate for all accommodations. Under the proposed changes:
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Guesthouses with fewer than 50 rooms will see the tax raised from $3 to $6 per day.
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Larger establishments, including resorts, city hotels, and guesthouses with more than 50 rooms, will have their daily green tax increased from $6 to $12.
An amendment was introduced by Kendhoo MP Mauroof Zakir during a session of the whole parliamentary committee. The subcommittee responsible for reviewing the bill decided to pass it in its original form, aligning with the government's proposal to raise the green tax without exemptions.
Despite support from MDP Parliamentary General Leader, Hithadhoo South MP Ibrahim Nazil to keep the green tax at $3 for hotels and guesthouses with 25 rooms or fewer, the exemption proposal was ultimately rejected. A total of 68 parliamentarians voted against the amendment, while 11 MDP members supported it.
With no further amendments presented, the bill was passed in a final vote, with 67 members in favour and 11 MDP members opposed.
Now that the whole parliamentary committee has passed the bill, it will proceed to the full parliamentary vote. If the bill gains approval there, it will be sent to the president for ratification and come into effect upon his endorsement.
In addition to the green tax amendment, parliament also approved three other government-proposed bills aimed at adjusting tax rates to boost public revenue. Among these was a hike in the Tourism Goods and Services Tax (TGST), set to increase from the current rate to 17% as of June next year.
