DRP requests six month delay for general GST

Main opposition Dhivehi Rayyithunge Party (DRP) Leader Ahmed Thasmeen Ali has sent a letter to the President requesting a six-month delay to the introduction of a 3.5 percent Goods and Services Tax (GST) approved by parliament last month.

In his letter, the minority leader noted that according to parliamentary rules of procedure, only the government could submit tax legislation. He urged the government to delay the implementation of the GST to allow businesses enough time to prepare. The General GST is due to come into force on October 2.

Thasmeen argued that a number of citizens could be subject to legal penalties specified in the legislation if they were not provided sufficient information about registering and paying the new direct tax.

In a booklet handed out to media last month titled “DRP’s response to the government’s economic nuisance package,” the party noted that the General GST would affect small businesses such as cornershops, cafes and teashops.

The businesses would “need a lot of preparation” to maintain accounts, install “modern computer systems and hire accountants” as well as provide customer’s statements showing the GST percentage.

Morever, taxing “total value of business transactions” would not be possible with GST at zero percent for some items.

Considering the potential “administrative confusion” and the country’s heavy reliance on imports, the DRP argued that levying a customs duty at the entry point to the country was more effective.

President’s Press Secretary Mohamed Zuhair told Minivan News today that the government viewed the DRP as the main opposition party and “gives a high priority to their concerns.”

“But the President has been advised by financial experts that all taxes should be part of one network and it is not sensible to omit one tax for the whole system to work,” he said.

Zuhair noted that “people wanted to delay the introduction of political parties” in the past, adding that “we have lost 30 years without a tax system.”

In May, the International Monetary Fund (IMF) approved a three-year support programme after the government agreed to “a package of policy reforms that will help stabilise and strengthen the Maldives’ economy.”

Under the IMF programme, the government committed to:

  • Raise import duties on pork, tobacco, alcohol and plastic products by August 2011 (requires Majlis approval);
  • Introduce a general goods and services tax (GST) of 5 percent applicable to all sectors other than tourism, electricity, health and water (requires Majlis approval);
  • Raise the Tourism Goods and Services Tax (TGST) from 3.5 percent to 6 percent from January 2012, and to 10 percent in January 2013 (requires Majlis approval);
  • Pass an income tax bill in the Majlis by no later than January 2012;
  • Ensure existing bed tax of US$8 dollars a night remains until end of 2013;
  • Reduce import duties on certain products from January 2011;
  • Freeze public sector wages and allowances until end of 2012;
  • Lower capital spending by 5 percent

10 thoughts on “DRP requests six month delay for general GST”

  1. Oh, the great dealer?! Playing a sympathy card here. Wonder why Thasmeen have waited for all these days with out this letter sent to Nasheed.
    Being an MP and the once the majority leader and the biggest opposition leader he should really know otherwise that tax bills and it's ammendments are only sponsored by the government.
    Why haven't he used his majority and opposition obligation to block the GST bill and it's implementations.
    Funny! This guy is now in loosemotin when his rivals exdrp officials created a new party to accountable MDP government under the banner of PPM.
    Thasmeen you are a failure! A bloody failure forever in Maldives politics

  2. Thasmeen you are a joke! I hope you quit politics soon! I would suggest you to settle your huge debts first.

  3. Hehe...this is crazzzzy!

    A letter?? If Thasmeen ever attended the majlis like he is supposed to, then he can argue the case along with all his other DRP friends. Why did he not do this months ago??

    But of course the blue party have been fighting so much amongst themselves that there's no time left to think about the job or the majlis or the people of our country.

  4. Good move, Thasmeen. The government should listen to you thi time. Your point is valid. No one wants to get a legal penalty unnecessarily.

  5. Let's delay everything shall we? It's a typical Maldivian custom to procrastinate and it explains a lot about the country and where it is today.

    Time and time again it has been proven beyond any doubt that Maldivians will only act when they have no other choice. It's time to get on with it!

  6. I don't know about this. I do feel the man has a valid point.

    Quite a few business owners I know don't have the slightest clue about how to go about preparing for the Tax.

    It's not that the businesses aren't willing - they're just ill-prepared. Not all of them have a proper accounting system or software, etc etc

  7. Thasmeen is correct to say that, " a number of citizens may be subject to legal penalties ...... If they were not provided sufficient information ...." and it is his Constitutional duty to say this when the bill was debated in the Majlis.
    The government press secretary shoul be aware that GST has a direct impact on the livelihood of the citizen in the for of earnings paid to the government as tax and impact of penalties. This was not the case when registering political parties. 30 days is simply not sufficient to understand a concept and implement it. I would support starting taxing but delay applying penalties by six months.

  8. @Mohamed Rasheed:

    "I would support starting taxing but delay applying penalties by six months."

    That's a sensible idea in some sense. I think that the government can find a lot of leeway by suspending certain penalties for a grace period. It must be careful in the way it does it, since suspending all penalties is the same as not implementing the taxation legislation in the first place!

  9. This is a gameplay of MDP. By making it look like idiot knows what he is talking about, MDP wants people to alienate against Maumoon's new party; show that Chasbe has got a few teeth and quarter of a cohone. THe new PPM is the biggest threat to Anni and he wants desperately people to support Chasbe more.

  10. What govt want is that every businessman including shopkeepers should have a 'cash book' with proper and authentic entries. But unfortunately, we will have to take help of some "Chartered Accountants" for this purpose - which are rare to find in our country.


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