GST hike is not intended to impose restrictions: Gov't

The government's proposed tax increase is a step to manage the economy and is not intended to impose restrictions on anyone, Presidential Spokesperson Miuwan Mohamed has said.

The government has proposed to increase GST from six percent to eight percent and TGST from 12 percent to 16 percent. The decision has directed criticism at the government by both the public and businesses alike.

Speaking to reporters at the President's Office on Wednesday, Miuwan said the tax rate should be increased due to changes in commodity prices in the global market. There is no basis for the claims that tax increases will harm the economy, he said.

"The IMF and the World Bank have also recommended changes in the tax rate in the Maldives," he said.

Miuwan said the increase in taxes would benefit the economy as a whole. The change will not have a significant adverse impact on income, he said, adding that employment opportunities and job security will increase once the economy is properly managed. He further said the government has discussed the tax increase with experts and sought the advice of international organizations regarding the change.

"The government will do whatever it takes to ensure that no citizen is deprived of any part of their income. In order to do this, the economy has to be managed properly. Increasing the tax rate is an important step to managing the economy," he said.

The debate on the government's bill to increase GST is being conducted in the Parliament's Committee of the Whole House. The tax increase amendment was moved by Ihavandhoo MP Mohamed Shifau on behalf of the government. The amendment has been opposed by the Maldives Travel Agency and Tour Operators (MATATO), the Maldives Association of Tourism Industry (MATI), and the National Hotel and Guesthouse Association of Maldives (NHGAM).