The opposition Maldivian Democratic Party (MDP) has criticized the government’s proposed bill to increase the Tourism Goods and Services Tax (TGST) and Green Tax.
The bill proposed amendments to the Tourism Act to increase TGST from 16 percent to 17 percent and Green Tax from USD 6 to USD 12.
During the debate stage in Parliament today, MDP MPs said the changes would cause serious implications.
"I don't support the government's proposed tax increase under the Tourism Act. I fully reject it. The government cannot explain why the taxes are being increased and what will happen when the taxes are increased," said minority leader Hithadhoo Dhekunu MP Ibrahim Nazil.
He said the increase in TGST and Green Tax would reduce the number of tourists coming to the Maldives and it would benefit neighbouring countries.
"I am sure that the number of tourist arrivals to the Maldives will be reduced significantly due to the tax increase. The neighbouring countries will benefit from this. They are applauding now," Nazil warned.
Vaikaradhoo MP Hussain Ziyad said the tax hike goes against the government's pledge. He also accused the government of lying to the people by claiming that the tax hike would not affect the general public.
"The reason I am not in favour of this amendment is because I feel it expands the tax base instead of expanding it, as promised by the President," he said.
Hanimaadhoo MP Abdul Ghafoor Moosa said there would be no benefit in increasing taxes without reducing government expenditure.
"Even if the government continues to increase taxes in every area possible, we will see no benefit as long as the government does not reduce its expenditure," he said.
Kendhoo MP Mauroof Zakir, with years of experience in the tourism industry, criticized the government for not consulting stakeholders.
The bills to increase TGST, Green Tax and airport fees and taxes were accepted by the Parliament with 58 votes and sent to the relevant committee for further research. MPs from the opposition MDP voted against the bills.
The bills proposed to increase TGST from June 2025 while Green Tax is planned to be increased from January 2025. The bill to increase airport fees and taxes proposes increasing fees and taxes for passengers other than Maldivians travelling in economy class. Economy class passengers are already subject to a USD 12 fee and a USD 12 tax.
