Malé, Maldives – Minister of Finance Ibrahim Ameer on Tuesday confirmed that the government has planned to increase Goods and Services Tax (GST) in 2023.
The GST hike will result in a 1 percent increase in Maldives inflation rate.
Speaking at a press conference held at the President’s Office on Tuesday, Minister Ameer stated that this decision was made with the advisement of the International Monetary Fund (IMF) and the World Bank.
The government has planned to increase General Goods and Services Tax (GGST) from 6 to 8 percent with Tourism Goods and Services Tax (TGST) increased from 12 to 16 percent.
The cost of living will increase significantly as the GGST increase will be reflected in the price of consumer goods.
We have to take corrective measures to decrease [state] expensenditure.Finance Minister Ameer
Minister Ameer further stated that slashing salaries of civil servants is also discussed.
Following the announcement, former President and incumbent Speaker of the Maldives Parliament Mohamed Nasheed stated that this decision was unacceptable and was made without discussing with the MDP parliamentary group.
Speaker Nasheed stated that the economic recovery could be achieved with debt restructuring instead of increasing GST. Nasheed also proposed to decrease state expenditure.
The Speaker also urged President Ibrahim Mohamed Solih to take corrective action before the ruling party MDP loses public trust.