MDP Chairman and former Economic Minister Fayyaz Ismail has raised alarms about the potential economic repercussions of proposed increases in tourism-related taxes.
Speaking at the "Havaru Beru" panel discussion organized by the MDP, he asserted that the government's plans to double the green tax on tourists and raise the Tourism Goods and Services Tax (TGST) could severely impact the economy.
The government's proposal includes increasing the TGST from 16% to 17%, effective June 1 next year. Additionally, the green tax, currently set at $6 per tourist per day, is set to rise to $12. Airport taxes on tourism goods and services are also expected to increase, with the fee rising from $3 to $6.
Fayyaz cautioned that the hike in tourism taxes could deliver a substantial shock to the economy. He emphasized that the MDP government had previously raised the tourism tax from 14% to 16% based on advice from the World Bank and criticized the current government for failing to recognize the potential damage to the tourism sector, which is one of the few industries performing well.
He further pointed out that countries competing with the Maldives' tourism industry are experiencing rapid growth, which could pose challenges for the Maldives if it raises tourism taxes. Increasing tourism taxes will not benefit the Maldives' tourism and resorts, he remarked, urging the government to reconsider its approach.
Speaking at the "Havaru Beru" panel discussion organized by the MDP, he asserted that the government's plans to double the green tax on tourists and raise the Tourism Goods and Services Tax (TGST) could severely impact the economy.
The government's proposal includes increasing the TGST from 16% to 17%, effective June 1 next year. Additionally, the green tax, currently set at $6 per tourist per day, is set to rise to $12. Airport taxes on tourism goods and services are also expected to increase, with the fee rising from $3 to $6.
Fayyaz cautioned that the hike in tourism taxes could deliver a substantial shock to the economy. He emphasized that the MDP government had previously raised the tourism tax from 14% to 16% based on advice from the World Bank and criticized the current government for failing to recognize the potential damage to the tourism sector, which is one of the few industries performing well.
He further pointed out that countries competing with the Maldives' tourism industry are experiencing rapid growth, which could pose challenges for the Maldives if it raises tourism taxes. Increasing tourism taxes will not benefit the Maldives' tourism and resorts, he remarked, urging the government to reconsider its approach.
