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Tax hike may lead to USD 50 million loss in Q1: MATAO

Maldives Association of Travel Agents and Tour Operators (MATATO) has said a tax hike could lead to a USD 50 million loss in the first quarter of 2023.

TGST will increase to 16% and GST to 8% in January 2023 with the recently passed tax hike which President Ibrahim Mohamed Solih has ratified.

MATATO expressed concern over the tax hike, stating that it points towards an economic mismanagement from the government. MATATO's statement on Thursday said that the tax hike would have adverse effects on tourism, which amounts for 74% of the total revenue.

MATATO said that the tax hike would also lead to a nearly MVR 2,000 reduction in service charge for resort employees. MATATO further said the tax hike decision was made without considerable analysis of economic impact and that tour operators and small businesses will suffer in the wake.

MATATO called on the Government to rectify the current directives to safeguard the economy. MATATO also called on the Parliament to intervene, citing that recent statements by Finance Minister Ibrahim Ameer have been misleading.