The Maldives Travel Agency and Tour Operators (MATATO) has said that the increase in the tourism industry tax (TGST) will have an adverse impact on the economy.
In a press release issued on Tuesday, Matato said the main-ruling MDP's tax increase proposal was not something any country has done and was proposed in a hurry. No developing country in the world has introduced a major tax increase of 25 percent without giving adequate time, the statement said.
The tourism industry accounts for 74 percent of the Maldives' total revenue, the statement said, adding that if GST and TGST are increased early next year, the tourism industry will be hit hard. This will have a significant impact on small and medium-sized businesses, MATATO said.
The statement further said MATATO had discussed the issue with the Maldives Association of Tourism Industry (MATI), the National Boating Association of Maldives (NBAM), and the National Hotel and Guesthouse Association of Maldives (NHGAM). The associations have also expressed concern over the sudden tax increase, said MATATO.
The statement further said the International Monetary Fund (IMF) has advised the government to increase taxes without knowing the true economic situation in the Maldives, especially that of the tourism industry.
If the tax rate is raised, the tax will be higher than that charged by the Maldives' tourism competitors, and there is a possibility of losing some markets, warned MATATO. The association said the government should think twice regarding the tax increase and give adequate time before implementing such a significant change.
