Maldives governor Sunday stressed on the need to enforce income tax but said the time was not right to introduce the tax to the archipelago.
Offering her expert opinion to the parliamentary budget review committee on Sunday, Dr Azeema Adam said Maldives presently has a decent tax system but stressed on the need to introduce income tax to the Maldives.
Income tax would complete the tax system in the Maldives, the governor noted.
However, the governor quickly insisted that the introduction of income tax must be given time and must be backed the necessary government policies.
"We need a proper policy that outlines the changes we plan to make to the entire tax system. The introduction of a new tax must be pre-planned and must come through such a policy," Azeema explained insisting that a sudden tax could have adverse effects on the country's fragile economy.
Finance minister Ahmed Munawwar meanwhile, had ruled out the introduction of income tax insisting that it was against government policy.
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 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.
