THE MALDIVES government intends to halve its proposed Tourism Goods & Services Tax (T-GST) hike in 2013 from four to two per cent.
The government began collecting a 3.5 per cent T-GST in January (TTG Asia e-Daily, May 26), and was planning to progressively increase it to six per cent next year, and 10 per cent in 2013. The T-GST in 2013 will thus be fixed at eight per cent.
Economic Development Minister Mahmood Razi was recently quoted in Maldives newspapers as saying that the government agreed to reduce the final tax rate at the request of tourism industry stakeholders.
The local tourism industry was earlier critical of the tax plans, but in recent months the view has mellowed.
Shafray Fazley, managing director of Viluxor Holidays said the travel trade was not drastically affected by the taxes, as the Maldives was an expensive destination anyway. “Most tourists to the Maldives don’t find the tax a burden,” he said.
David Kevan, partner at UK-based Chic Locations, said his company recently received new contracts based on the higher tax levels, but did not notice that much of an impact.
However, Fazley added: “From an agent’s point of view, increasing taxes can be a hassle when updating records, systems and our loyal partners.”
