Maldives Association of Travel Agents & Tour Operators MATATO says raising taxes in the country would impact the small businesses within the tourism industry.

This comes after Finance Minister Ibrahim Ameer all but confirmed that the government is looking to increase the GST and TGST in the country to ease the economic situation facing the Maldives.

In a statement, MATATO said that the government had not considered the impact such a decision would have on the tourism industry.

The Association said that while the global tourism market is now mostly open and with other island destinations accepting visitors, increasing the TGST would further hike up the room prices of resorts. It said that this in turn would make potential customers from choosing the Maldives as their holiday destination.

MATATO further said that increasing the TGST would mean heavy impacts for small businesses within the industry like guesthouses and safaris and that authorities should give the industry ample time to adjust before implementing such changes.

It said that the industry would need at least a year to prepare for such a change.

MATATO also pointed out that with the hike in fuel costs and travel costs, resort charges have increased as it and this would put the industry at a further disadvantage.

It urged the government to look into cutting state expenditures instead of raising taxes to support the economic measures.