New tax rates to come in to effect from Sunday
The decision to increase the tax rate was taken to boost the government's revenue due to the current slowdown in the global economy.
By
Aishath Fareeha Abdulla
The new tax rates which drew bipartisan criticism across the political spectrum before being passed by the parliament and ratified by the President Ibrahim Mohamed Solih will come in to effect from Sunday.
The GST and TGST taxes were hiked as part of an amendment to the Goods and Services Tax (GST) Act, which the government claims is aimed at improving the revenue of the state.
With the amendment in the act, the tax rates to be levied from January 1 are:
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From public goods and services (GST) - 8%
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From tourist establishments (TGST) – 12%
At present public services are taxed at 6% while tourist establishments charge 8%.
And even thought the GST and TGST amounts will increase, the Green Tax rates being currently charged remain the same.
Tourist resorts and hotels with more than 50 rooms levy $6 per night per guest as Green Tax while establishments with fewer rooms charge $3.
Maldives Association of Tourism Industry (MATI) and the travel agents' body MATATO have expressed concern that the tax rate hike will have an impact on tourism. However, the government believes that even if there would be challenges initially, these would soon sort itself out.
