Tourism small businesses will suffer if taxes are raised: MATATO

The Maldives Association of Travel Agents and Tour Operators (MATATO) has said that the government's proposed increase in GST and TGST will affect tourism small businesses.

In a statement released following the government's decision to raise taxes, MATATO said it believes this is not the right time to increase the TGST and TGST rates.

The association said the tourism industry directly accounts for 74 percent of the Maldives' revenue; therefore, raising taxes would adversely impact the tourism industry.

One of the reasons for this is that the borders of all competing destinations are now open, making it important to stay competitive. The association believes that if the TGST and GST rates are raised, the Maldives' tourism will lose its competitive edge over its competitors, and the country's guesthouses, safari-liveaboards, small and medium enterprises as well as budget resorts would face challenges.

The association, which represents about 150 companies, said the government has not yet announced a date for the change in GST and TGST rates. However, the association noted that the agreements in the tourism sector are for two years. While many companies have given tourism rates until 2023, the association said the change in the tax would have a major impact on tourism.

The Pacific Asia Travel Association (PATA), which represents the region, said MATATO is working closely with relevant government ministries. The association is well aware of the impact of the current situation on government revenue and has asked the government to reduce spending and manage debt.