Finance Minister Abdulla Jihad today revealed that the decision has been made to revise the import duties and reduce Goods and Services Tax (GST).
Speaking to Haveeru, Finance Minister stated that the government was striving to revise the duty rates and cut back GST.
However, Jihad did not disclose the details of the revisions being made to the duty rates or the amount of reduction from the present GST.
“There hasn’t been an increase in State revenue by increasing GST after reducing duties. The GST had been increased from this year to cover the cut down on duty rates. But GST revenue does not even come close to covering it,” Jihad detailed.
State had earlier earned about MVR2 billion in revenue from import duty, while the amount is estimated to be halved following the reduction on import duty. The previous administration had expected GST to cover the difference in revenue from import duty.
However, the present government has stressed that GST would not earn that much revenue for the State. In addition, the expected fall in prices after reducing import duties has also failed to materialize, according to the government.
Jihad further added that the government was currently undertaking efforts to cut back the State budget deficit. To that end, the government was looking to cut down expenditure by 15 percent from the State budget while exploring ways to increase State revenue, Minister detailed.
According to the Finance Minister, in addition to reducing GST, discussions were also ongoing to increase Tourism Goods and Services Tax (TGST), where the rate of increase would be decided after consultation with relevant members of the tourism industry.