The Maldives Travel Agents and Tour Operators (MATATO) had said that an increase in the Tourism Industry Tax (TGST) would have an adverse impact on the economy.
In a press release issued on Tuesday, Matato said the main ruling MDP’s tax increase proposal was not done by any country but was rushed. The statement said that no developing country in the world has implemented a substantial tax increase of 25% without giving enough time.
Tourism accounts for 74 percent of the Maldives’ total revenue, the statement said, adding that it would be hit hard if the GST and TGST were raised early next year. According to MATATO, this will have a significant impact on SMEs.
The statement further stated that MATATO has discussed the issue with the Maldives Association of Tourism Industries (MATI), National Boating Association of Maldives (NBAM) and National Hotel Association of Maldives (NHGAM). MATATO said the associations also expressed concern about the sudden increase in taxes.
The statement further stated that the International Monetary Fund (IMF) had advised the government to increase taxes without knowing the true economic situation in the Maldives, especially the tourism industry.
MATATO warns that if the rate is raised, the tax will be higher than what Maldives’ tourism competitors charge and risk losing some market. The association said the government should think twice and give it enough time before implementing such major changes.
