International Monetary Fund IMF has welcomed the Maldivian government's plans to increase the tourism and domestic goods and services taxes respectively from 12 to 16 percent and from 6 to 8 percent in 2023.
IMF said this in a statement issued after a visit to the Maldives from one of its mission at the end of last month.
It said that the economic growth is gathering pace in the Maldives and that the economic recovery provides a window of opportunity to swiftly implement needed reforms to secure fiscal and debt sustainability.
IMF said that critical reforms include raising domestic revenue, rationalizing public spending, in particular capital spending, reducing the interest burden by limiting non-concessional borrowing, and reforming subsidies while providing targeted assistance to the most vulnerable.
It further said that the Maldivian authorities’ plans to increase the tourism and domestic goods and services taxes respectively from 12 to 16 percent and from 6 to 8 percent in 2023 are welcome and important initial steps in this direction.
IMF added that swift implementation of the authorities’ intention to reform subsidies and reduce the dependence of SOEs on the central government’s budget would help reduce fiscal vulnerabilities.
The government had announced earlier that it was discussing on measures to increase the goods and services taxes to further stabilize the economy but had said that no decision has been taken yet on the change.
