The International Monetary Fund (IMF) has said that the Goods and Services Tax (GST) charged in the Maldives is lower than in other countries.
A report issued by the IMF notes that the Maldives' GST is lower than that charged in other countries. Therefore, if GST was to be increased in the Maldives, it could be increased to eight or ten percent, the report said.
The IMF recommends that GST be increased gradually, first from six percent to eight percent. The organization also recommends increasing the Tourism GST (TGST) from 12 percent to 14 percent. Later on, GST can be increased from 8 to 10 percent, and TGST from 14 to 15 percent, the report said.
However, the IMF said it is best to wait until 2024 to increase the tax percentages, provided that the current inflation situation stabilizes.
The government is working to increase GST and TGST to increase state revenue next year. The state currently charges 12 percent as TGST, while GST is levied at six percent. The government wants to increase TGST to 16 percent and GST to 8 percent.