Maldives cuts T-GST from 10 percent to 8 percent

Tuesday, 16 August 2011 23:23

The government has agreed to reduce the Tourism Goods and Services Tax (T-GST) from 10 percent to eight percent.

The Tourism Goods and Services Tax Bill submitted to the parliament proposes to increase the current amount of 3.5 percent to six percent next year and 10 percent in 2013.

However, a presentation given by Economic Development Minister Mahmood Razi last evening said that eight percent will be deducted as T-GST from 2013 onwards, but all the documents distributed to attendees stated that 10 percent would be deducted.

Razi revealed today that the government agreed to reduce the amount to eight percent on the request of industry stakeholders and would facilitate other concessions based on the concerns of the industry.

“When introducing a tax, both sides, the collector and the payer, have to reach an agreement on the matter. Our aim is to make taxation a success even if it means compensating in certain situations,” he said.

Minister Razi said further concessions made include increasing the amount deducted as capital costs from profit, increasing the amount deducted from losses and a decrease to the withholding tax.

President Mohamed Nasheed had earlier said the government, under its newly announced economic reform programme, would facilitate in extending resort leases to 99 years and owning the land.

The government began collecting a 3.5 percent T-GST this year after giving the opportunity for resorts to extend their leases for 50 years.

The tourism industry earlier criticised the government’s taxation plans but prominent businessmen and the Maldives Association of Tourism Industries (MATI) last evening voiced support for the government’s fiscal and economic reform programme.


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