Tourism association opposes tax hike 'for the moment'

Maldives Association of Tourism Industry (MATI), an association of resort owners, on Wednesday opposed the government's proposal to increase taxes from next year.

MATI's direction came in response to a letter sent by parliament to the association seeking their views on the government's proposal to increase GST from 6% to 8% and TGST from 12% to 16% from next year. The letter was read out by Speaker Mohamed Nasheed, who presided over the meeting of the parliament's committee of the whole house which is studying the bill.

"MATI believes that this is not the right time to raise taxes. The reason is that the tourism industry in the country is already struggling to tide over various disruptions," the letter stated.

MATI has sought a minimum of 12 months or one year to implement any change in taxes.

The parliament asked MATI to send its representative to the committee session to provide their views, but MATI said it could only send a representative after board approval. 

Nasheed said finance minister Ibrahim Ameer and members of the guesthouse association will attend Wednesday's committee session to study the bill.

In the past too, MATI has expressed his opposition to tax hikes at the moment. Tourism organisations feel that if taxes are to be hiked, adequate time should be given. The reason is that a year ago, there were agreements to sell holiday packages to tour operators and tourists. Companies will have to face huge losses if they raise taxes after a six-month notice.

Last week, MDP issued a three-line whip to pass a bill sent by the government in late August to amend the Goods and Services Tax Act to raise some taxes to increase the government's revenues. This has led to resentment among party members.

Although MDP's Parliamentary Group (PG) has issued a three-line whip in this regard, Nasheed told the committee on Monday that he would not vote on raising taxes without the words of experts.