Increasing the percentage charged as Goods and Services Tax (GST) is expected to generate an additional MVR 3.14 billion as revenue next year.
The government has proposed amendments to the law to increase the percentage charged as general GST from six percent to eight percent and the tourism sector GST (TGST) from 12 percent to 16 percent.
The Finance Ministry's Fiscal Strategy Statement said revenue is expected to increase by MVR 974.6 million if the general GST is levied at eight percent. When TGST is charged at 16 percent, revenue is estimated to rise by MVR 2.16 billion.
The budget for this year estimates a revenue of MVR 2.87 billion from general GST and MVR 4.82 billion from TGST.
Revenue increase forecast for 2024 - 2027
2024 - MVR 1.15 billion from GST, MVR 2.60 billion from TGST
2025 - MVR 1.22 billion from GST, MVR 2.85 billion from TGST
2026 - MVR 1.30 billion from GST, MVR 3.08 billion from TGST
2027 - MVR 1.40 billion from GST, MVR 3.32 billion from TGST
In addition to increasing GST, several measures have been proposed to increase government revenue next year. These include taxes on plastic bags, land allocation for tourism, real estate tourism, and land sales. The bill to impose a tax on plastic bags has already been introduced in the Parliament.
While the bidding process for land allocation for tourism has been completed, the Maldives Funds Management Corporation (MFMC) is working on formulating policies for real estate tourism. Furthermore, the Planning Ministry is working on the necessary changes to the Land Act regarding the sale of land.
The government is proposing a budget of MVR 41 billion for the upcoming year.
