Government proposes amendment to increase T-GST to 15 percent

Government has proposed a bill to parliament with amendments to the Goods and Services Tax Act to increase Tourism Goods and Services Tax (T-GST) from the current rate of 8 percent to 15 percent.

The bill was presented by Vilufushi MP Riyaz Rasheed, on behalf of the government.

The amendment to the Goods and Services Tax Act states that the Tourism Goods and Services Tax of 8 percent, that has been imposed since January this year, shall be increased to 15 percent starting this month.

The GST Act imposed a T-GST of 3.5 percent in 2011, which was increased to 6 percent in 2012 and again to 8 percent at the start of this year.

Even though the amendment to the GST Act does not propose an increase on general GST, the bill does ask to exclude diesel and petroleum from the list of goods that imposes a zero rate GST.

While the government seeks to find an avenue to increase their revenue, the parliament recently rejected an amendment proposed by the government seeking to allow collection of a $30 service charge from all foreigners exiting the country through airports. MPs who rejection also included those who support the current government coalition.