Finance Minister Ibrahim Ameer has said that adequate time has been given to businesses to prepare for a tax hike.
Minister Ameer Wednesday told the Committee of the Whole House, which is researching the government's bill on increasing the GST percentage, that discussions were held with industry partners regarding the tax hike last June. While some requested a six-month wait before implementing the tax increase, others asked for a year's delay, the minister said.
The GST hike bill was sent to parliament in August, said Ameer, adding that enough time had been given before the tax increase and that the tax hike should be implemented as soon as possible.
"The state has lost about MVR 98 billion from potential GDP and about MVR 36 billion from public finances due to the COVID-19 pandemic," he said, reiterating the need for tax increases.
The minister attributed the current positive positions of businesses to the measures taken by the government during the COVID-19 pandemic. Ameer said that although the Maldives' economy shrank by 33.5 percent in 2020, the economy grew in a "V-shape" shape last year, which was unprecedented growth.
The minister said the government had provided assistance to small and medium enterprises, resorts, and private individuals to mitigate the losses caused by the COVID-19 pandemic. While the move increased the country's debt, now is the time to raise taxes to improve the state's economy, he said.
The minister further said the state was yet to receive MVR 15 billion due in revenue and penalties. Steps are being taken to recover the money, he said. The disclosure of the names of tax evaders and the requirement of tax clearance reports are also enforcement measures, he said. There are difficulties in receiving land rent for non-operating resorts, and rules are being made to resolve this problem, he said.
