The Government-sponsored Tax Act Amendment Bill has received a lot of attention lately. Not necessarily for the right reasons though and they certainly do not help the uncertainty around the bill.
The government has been pushing the Tax Act Amendment Bill that would see a hike in taxes and the government has said that this was necessary to maintain the economic outlook of the country.
The Bill was submitted to the Parliament by the MP for Ihavandhoo Constituency Mohamed Shifau. It proposes increasing the Goods and Services Tax GST from 6 percent to 8 percent and hiking the Tourism Tax from 12 percent to 16 percent.
While the majority ruling party MDP holds decision-making power in the Government as well as the Parliament, one would think that a bill pushed by the Government would sail smoothly through the Parliament.
But this has not been the case.
The need for tax hike deemed 'urgent'
It may seem that the Government is pushing for the tax hike in a desperate bid to cover its own losses and ballooning debts but its plans to increase the taxes have been backed by its international financial partners. Especially the World Bank.
World Bank Country Director for the Maldives, Sri Lanka, and Nepal said in a Tweet yesterday that World Bank analysis shows that the Maldivian government's fiscal position and balance of payments have deteriorated due to rising global commodity prices.
He added that urgent tax hikes are a meaningful step to increase revenue.
The World Bank has said that the Maldivian economy has responded well after the COVID-19 pandemic. However, it said the pressure on domestic inflation, the government's fiscal position, and the balance of payments have increased due to rising global commodity prices.
Pushback from MDP MPs
Though the Tax Act Amendment Bill was submitted to the Parliament on the behalf of the Government, the opposition to the bill appears to be within the MPs representing the government majority party MDP.
The bill was debated at the Committee of the Whole House last month and it resulted in heated exchanges between MPs representing MDP.
During the debate, several MPs from MPD said that they did not support the bill and don't want a hike in taxes in the country.
The MPs said that before increasing the taxes, a thorough study should be done of how the change would affect individual citizens and businesses. Most of these MPs belonged to the MDP faction supporting Speaker of the Parliament Mohamed Nasheed.
This led MDP MPs supporting President Ibrahim Mohamed Solih to voice their anger during the debate.
Stalling for more time maybe
The controversial bill is now at the voting stage. But in the last two days, the parliament session ended without taking a vote on the bill. First on Monday by MP for Vilufushi Constituency Hassan Afeef citing a lack of quorum and yesterday by the Speaker of the Parliament Mohamed Nasheed himself.
On both occasions, MPs from MDP were vocal about the decision to end the sessions without a vote on a bill that has now been with the parliament for nearly two months.
The in-fighting appears to be ongoing as MDP MP yesterday turned to President Solih for a solution.
Time for the President to intervene
After yesterday's session was cut short without a vote, around 30 MPs from MDP headed to Muliaage' to meet the President. They shared their concerns with the President and are now hoping to see if he can expedite the vote on the much-needed bill.
The MPs from MDP appear disgruntled with the Speaker himself. MDP Parliamentary group leader and MP for Hithadhoo Medhu Constituency Mohamed Aslam spoke to 'The Press' about it.
MP Aslam said that as Nasheed is MDP's leader, all the MPs deeply respected him. He also said that MPs try not to oppose Nasheed's decisions during legislative work.
He said that the Speaker keeps on saying that he was acting as per the rules set for parliamentary proceedings but noted that sometimes the Speaker's actions went against these rules and regulations. MP Aslam added that the MPs have shared these concerns with the President.
When asked if the MPs consider taking action against the Speaker, MP Aslam said that MDP MPs were divided over the matter. He said that they cannot seem to agree on whether or not to impeach Nasheed or take any other action. He said that out of respect for Nasheed, most MPs are still willing to work with him to resolve their concerns.
