Male’, Maldives – The government of Maldives has expedited the process of increasing Goods and Services Tax (GST) by planning to propose the bill to the Maldives Parliament ahead of the third term.
Reports suggest that the government will propose the bill before parliament opens for a third term on August 16.
Local media reports that the government has planned to implement the changes to GST within six months and to achieve this, has fast tracked the process of proposing the bill to the parliament.
The GST hike will result in a 1 percent increase in Maldives inflation rate.
The plan to increase GST was announced earlier this month by Minister of Finance Ibrahim Ameer. Minister Ameer announced that 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.
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.