The governing body enforcing taxation, Maldives Inland Revenue Authority (MIRA), has urged businesses to prepare for the rise in the rates of Goods and Services Tax (GST) and Tourism Goods and Services Tax (TGST) which will come into force next year.
President Ibrahim Mohamed Solih ratified the government proposed tax hike bill passed by the parliament on Tuesday, publicizing the amendment on government gazette.
With the ratification of the bill, GST will rise from 6 percent to 8 percent, and TGST from 12 percent to 16 percent starting next year.
The bill was submitted to the Parliament on behalf of the government by Ihavandhoo MP Mohamed Shifau.
It was passed with a majority vote of 55 out of 88 MPs last Wednesday, without any amendments, as initially proposed by the government, which was greenlighted by the Parliament’s Whole-House Committee.
In a circular on Tuesday, MIRA emphasized that GST must be charged at the new rates if the ‘time of supply’ of the transaction occurs on or after January 1, 2023.
In this regard, if a registered business supplies goods and services on a 24-hour basis, the tax rates applicable to the value of supplies made after 00:00am on January 1st will be the new rates; 8 percent for GST and 12 percent for TGST.
Registered businesses that do not fall in this category should implement the new rates from the time of opening their business on January 1.
Therewith, MIRA has urged to take necessary action to bring any system changes beforehand that may be required to charge the new rates and to have a ready arrangement to display the prices of goods and services inclusive of the new rates.