Government proposes GST exemption for sale of flats under state-funded housing projects

Preliminary debate began at yesterday’s sitting of parliament on an amendment proposed by the government to the Goods and Services Tax (GST) Act to make the sale of flats under government housing projects exempt from the tax.

The amendment (Dhivehi) submitted on behalf of the government by Progressive Party of Maldives (PPM) MP Ahmed Rasheed also proposes reimbursing GST payments to persons who have purchased flats or housing units constructed under government housing projects.

The reimbursement is to be made within 30 days of ratification of the amendment by the president.

While real estate transactions were previously exempt from GST, the previous parliament passed an amendment in February this year reversing the exemption.

While all MPs were in favour of the proposal during yesterday’s debate, opposition Maldivian Democratic Party (MDP) MPs criticised the government for reversing tax exemptions for sale of flats.

Several MPs also argued that tax exemptions should apply exclusively for social housing schemes and not for luxury flats.

While MP Ali Azim suggested a hidden agenda behind the move to reimburse tax payments, MP Ahmed Nashid noted that funds were not allocated for the expenditure in the 2014 state budget.