The Parliamentary Committee of the Whole House has passed the government-proposed amendment bill to increase tax rates in 2023.
Parliamentarian Mohamed Shifau proposed the Bill on Amendment to the Goods and Services Tax Act on behalf of the government to increase the Goods and Services Tax (GST) and Tourism Goods and Services Tax (TGST) in an effort to increase state revenue. He said it was crucial to address the concerns of the other parliamentarians by determining the impact the amendments would have on the country’s economy. He proposed that a sub-committee be formed to evaluate the bill, with members of the Parliamentary Committee on Economic Affairs and the whole house committee.
Several amendments were opened to the vote in the committee process although no amendments were passed by the committee. The amendment to increase the tax rates was passed with 50 parliamentarians voting in favour and 19 parliamentarians voting against it.
Ministry of Finance stated the government decided to implement tax hikes in response to changes in the global market and in accordance with the current economic situation, which threatens to become worse if no measures are taken. As such, the government will be decreasing expenditure and implementing a variety of measures to increase state revenue, including increasing TGST from 12% to 16% and increasing GST from 6% to 8%. The changes are proposed to be implemented in January 2023.