Maldives government on Friday ruled out introducing income tax in the archipelago but assured gradual tax reform.
Most lawmakers during the budget review committee sit-down on Thursday expressed concern over the new measures proposed to boost revenue which largely looks to impose a regressive tax system.
Responding to the concerns, finance minister Ahmed Munwwar insisted that the Maldives boasts a contemporary progressive tax system, pointing out the Business Profit Tax (BPT) as a prime example to back his statement.
So even if the state has steered clear of income tax, business related taxes have been charging taxes from the source of the country's income elite, Munwwar explained.
"The government has not considered an income tax policy. But that doesn't mean we can call it a regressive tax system. This is definitely a progressive tax system. We are still looking at major reform for this system. This system has been praised by major international financial institutions such as the World Bank," the minister noted.
Munawwar also insisted that the government has been careful in reforming the tax system to minimize the impact on the country's fragile economy.
