Debate has begun in the People's Majlis today on a bill submitted to halt the collection of tax previously levied on inbound tourism products and services provided by entities without a permanent establishment carrying out business in the Maldives.

The collection of tax from these entities began on the first of this month following an amendment to the Goods and Services Tax Act.

On behalf of the government, Kolamaafushi constituency member Ibrahim Didi submitted the bill today to amend that same act and scrap the tax. The bill also states that another objective is to further strengthen the measures MIRA can take against non-compliant GST payers.

The bill states that if any party has obtained a tax benefit, or considering the substance of a transaction conducted by them, it is believed to have been done to facilitate obtaining a tax benefit, it will be considered a tax avoidance transaction.

The Commissioner General is granted the discretion to determine that if any party acts to evade GST payments, such a transaction will not be accepted for tax purposes.

The bill details the circumstances that will be considered tax benefits. These include reductions in the amount payable as GST and delays in the date by which GST is required to be paid.

According to the bill, the act will come into effect upon passage, ratification, and publication in the Government Gazette.

Based on the estimates included in the bill, it is noted that with the implementation of the bill, the revenue previously projected to be earned from inbound tourism will not be received by the state. Previously, it was estimated that 1,608.5 million Rufiyaa in revenue would be generated through GST collected from off-shore booking platforms and foreign tour operators.