The government is discussing ways to raise revenue to cover government expenditures but has not yet decided on any measures aimed at raising certain taxes, the government has said.
The government's comments come while some working in the tourism sector on Sunday told the media that the government has proposed to increase GST and TGST to cover government expenditure.
GST is a tax on basic goods and services sold to the public. TGST is a tax levied on services sold to and obtained by tourists.
A person involved in the discussions told AVAS that the government has proposed to increase GST from 6 percent to eight percent and TGST from 12 percent to 16 percent from January next year.
"We told them that tourists come to the Maldives with bookings made well in advance. We said not to make such a change without giving enough time," he said.
He added that if the government's proposal is implemented early next year, the tourism sector will suffer negative impacts. The industry is working on gathering information on such a scenario, he said.
However, a government official Monday said that the government has held discussions with various parties to find ways to raise revenue to cover expenditure, but no decision has been taken on specific tax increases. He said that if a change is made to the tax system, it will be done after consulting all stakeholders.
"We also know what can happen if we suddenly raise certain taxes. So, we have not yet decided whether to raise or lower certain taxes. But we will discuss extensively to find ways to increase revenue," the official said, speaking on condition of anonymity.
A tax on the value of goods and services was imposed in 2011 by former President Mohamed Nasheed's government despite much opposition. TGST was levied at 3.5 percent at the time, but under the latest amendment in 2014, it is now charged at 12 percent.
