Less than a year after President Dr. Mohamed Muizzu pledged to not raise any taxes, his government on Tuesday increased Tourism Goods and Services Tax (TGST), Green Tax and airport fees.
The Parliament approved bills on hiking these taxes on Thursday. The changes have now been published in the government gazette with 30 days given to reform rules in accordance with the amendments.
With the amendments, TGST will be increased from 16 percent to 17 percent starting from June 2025. TGST revenue is expected to be MVR 9.9 billion (USD 642 million) next year.
Green tax will increase from USD 6 to USD 12 from January 2025 and rates for properties with less than 50 rooms have been increased from USD 3 to USD 6.
Airport taxes and fees will be increased from December 2024. All fees and taxes other than those charged from Maldivian passengers travelling in economy class will be increased from that date.
Pledges on tax
During the presidential election campaign in 2023, President Muizzu said he did not intend to raise any tax ceilings.
At the Sangu TV debate in September 2023, moderator Ibrahim Waheed (Asward), who is the current Youth Minister, asked a question on taxes.
"Do you have any plans to pay the USD 1 billion in 2026? After getting the people to vote, are you thinking of taxing the people and businesses when you come to power? Or how will you pay the money?" he questioned Muizzu.
He further asked Muizzu whether an additional tax would be levied.
"We will not introduce any additional taxes. We will use the existing taxes to expand the tax base. This means that the unfinished resorts will be completed, and in addition, we will be able to get this money from other sectors, especially fisheries," Muizzu said.
Even after assuming office, President Muizzu promised not to hike taxes during the campaign for the parliamentary election earlier this year.
