Malé, Maldives – President’s Office Spokesperson Miuvan Mohammed has said that the increase in TGST will bring positive changes to the government’s foreign exchange reserves.
Replying to a question from a journalist at a press conference held at the President’s Office today, Miuvan said one of the most important steps to be taken to improve the government’s reserves is to increase foreign exchange earnings and improve foreign exchange reserves.
“At this juncture, the TGST rate hike will have its positive impact on reserves as well. Next year, hopefully, we will see those changes.” Miuvan said.
However, many tourism industry players are criticizing the government’s decision. The increased tax will cause a USD 50 million loss to tourism businesses in the first quarter of next year, Maldives Association of Travel Agents & Tour Operators (MATATO) said.
Miuvan said inflation is expected to remain at 5.5 percent with the change in GST. This is a lower rate compared to other countries in the region, he said.
With the tax changes from January next year, TGST will be increased from 12 percent to 16 percent and GST from 6 percent to 8 percent.
The government has said the main purpose of the amendment to the tax law is to increase government revenue due to government spending policies and changes in the global economy.