The Tourism Ministry has condemned the Maldives Association of Tourism Industry (MATI) for “making statements to media outlets in a way that misleads the public about the government’s economic agenda”.
In a statement, the Ministry claimed that “MATI’s misleading statements in various media recently about the tax bills of the government’s economic reform agenda imply that the government’s efforts were undertaken without consulting officials from the tourism industry.”
The Ministry said it had “consulted a number of parties active in the tourism sector and sought advice for shaping the tax bills so that it would not be a disproportionate burden on the industry.”
“After these consultations, the Ministry is assured that businesses in the tourism industry support the reform agenda. Likewise, those in the front ranks of the tourism industry as well as MATI support it. Therefore, [the ministry] regrets an organisation like MATI making statements that are contrary to the advice and suggestions of senior industry leaders.”
Secretary General of MATI ‘Sim’ Mohamed Ibrabim was not responding at time of press.
The government has presented a raft of economic reform bills to parliament detailing several new taxes, including a business profit tax, general GST and income tax of those earning over Rf 30,000 (US$2000) a month. The government is also looking to increase its previously-passed tourism goods and services tax (TGST) of 3.5 percent to 6 percent, in exchange for lowering import duties, claiming that this will benefit businesses by allowing them to pay tax at the point of sale.
Secretary General of the Maldives Association of Travel Agents and Tour Operators (MATATO), Mohamed Maleeh Jamal, told Minivan News that his organisation had been consulted by the Maldives Inland Revenue Authority (MIRA) prior to the passage of the TGST, and was pleased to see some clauses implemented reflecting the input.
While no government body had sought to meet MATATO regarding the latest batch of bills, Jamal said parliament had forwarded them to MATATO for comment and input.
The Maldives pledged to the International Monetary Fund (IMF) earlier this year that it would pursue a package of policy reforms in exchange for a a three year economic programme to stabilise and strengthen the Maldives’ economy.
Under the new IMF program the Maldives has 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