Total GST Reached MVR 14.04 Million Last Year

The Goods and Services Tax (GST) from both the general and tourism sectors in the Maldives has shown a steady increase over the years, according to recent data released by the Maldives Inland Revenue Authority (MIRA). The report, covering the period from 2015 to 2023, highlights the significant growth in GST revenue across various atolls and sectors.

General and Tourism Sector GST Collection Trends

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The data reveals a consistent growth trajectory in GST from both sectors. In 2023, the total GST reached MVR 14.04 million, marking a substantial increase from MVR 6.18 million in 2015.

Male’ City emerged as the leading contributor to GST, with its share consistently dominating over the years. In 2023 alone, Male’ City contributed MVR 6.02 million, representing 42.9% of the total GST revenue.

Other notable contributors to GST collection in 2023 include Kaafu atoll (21.1%), Noonu atoll (5.5%), Raa atoll (5.4%), ADh. atoll (4.6%), and B. atoll (5.5%), which also showcased consistent growth in GST contributions over the years.

Atoll-wise Analysis: GGST

From 2015 to 2023, the total General Sector GST increased significantly, garnering MVR 5.2 million in 2023 in comparison to MVR 3.7 million the previous year.

Male’ City consistently accounted for the majority of the General Sector GST collection, maintaining a share of over 93.2% in 2023.

Other regions such as Addu City (1.93%) and HDh. atoll (0.91%) also demonstrated notable contributions to the General Sector GST.

Atoll-wise Analysis: TGST

The net total TSGT liability for 2023 was recorded at MVR 8.7 million, in comparison to MVR 7.5 million the previous year.

Kaafu Atoll consistently emerges as the largest contributor to TGST over the years; TGST shares for the atoll slightly decreased from 2015, dropping from 35.6% to 33.3% over the period.

Male’ City also stands out as a substantial contributor, with its share varying between 11.8% to 12.4% across 2022 and 2023.

Other notable contributors to TGST in 2023 include Noonu atoll (8.7%), Raa atoll (8.6%), ADh. atoll (7.2%), and Baa atoll (8.6%). As such, the data shows ADh and Baa atolls have been seeing a declining trend in their TGST share over the years, falling from 12% and 8.9% in 2015, respectively.

Fuvahmulah City’s TGST share remains consistently minimal throughout the years, starting from 0.007% in 2015 and peaking at 0.017% in 2019 before suddenly dropping to 0% in 2022 and 2023.

Sector-wise Breakdown: GST

In terms of net GST liability reported, 2023 saw collection rise to MVR 5.2 million from MVR 3.7 million in the previous year.

From the data, it can be observed that the manufacturing sector had fluctuating figures over the years but saw a significant increase from MVR 102,935 in 2022 to MVR 132,545 in 2023.

The construction sector has shown a steady increase over the years, with a sharp rise in GST shares at the industry level from 18.26% in 2022 to 23.00% in 2023.

Some sectors, such as Mining and Quarrying, Public Administration and Defence, and Compulsory Social Security, showed no reported liabilities over the years.

In contrast, human health and social work activities showed a negative reported liability in some years, contributing 0.08% in 2023.

Sector-wise Breakdown: TGST

According to the data, net TGST for 2023 was MVR 8.7 million; MVR 7.5 million was recorded the previous year.

The TGST reported by tourist resorts saw a consistent increase over the years, reaching MVR 7.4 million in 2023 from MVR 3.5 million in 2015.

Likewise, TGST reported by tourist hotels fluctuated slightly, with a peak of MVR 123,870 in 2023, compared to MVR 76,464 in 2015.

Reported TGST from guest houses showed significant growth, escalating from MVR 31,891 in 2015 to MVR 156,120 in 2023, while TGST from tourist vessels demonstrated moderate growth, reaching 79,630 MVR in 2023, up from 57,046 MVR in 2015.

Impact of Policy Changes

The enactment of the 6th amendment to the GST Act, which increased the GST rates from 6% to 8% for the General Goods and Services Tax (GGST) and from 12% to 16% for the Tourism Goods and Services Tax (TGST) from January 1, 2023, has likely influenced the overall GST collections.

Business Profit Tax (BPT) Analysis

The BPT data included in the report for 2018 and 2019 illustrates the tax payable by different industries. In 2019, the total BPT reported was MVR 2.5 billion, while 2018 reported MVR 2.2 billion in BPT.

Notably, the manufacturing sector consistently stands out as a significant contributor, with BPT increasing from MVR 39.4 million in 2018 to MVR 40.2 million in 2019.

Other notable sectors include wholesale and retail trade, transportation and storage, and information and communication, which also demonstrate substantial BPT payments.

However, some sectors show fluctuations in BPT contributions. For instance, the electricity, gas, steam, and air conditioning supply sector witnessed a decline from MVR 5.1 million in 2018 to MVR 1.6 million in 2019.

Similarly, the water supply, sewerage, waste management, and remediation activities sector experienced a decrease in BPT payments from MVR 74.3 million to MVR 35 million during the same period.

Income Tax Distribution

According to the report, MVR 2.8 billion was reported in income tax for 2022; 2021 saw total income tax at 2.1 billion, while 2020 was at 1.1 billion.

Although wholesale and retail trade traditionally dominate income tax payments, the tourism sector emerged as a significant contributor, particularly in 2022, where it accounted for 31.88% of total income tax payments.

The construction sector, despite facing fluctuations in BPT payments, maintains a notable share of income tax contributions, showcasing its continued importance in the Maldivian economy.

Conversely, sectors like agriculture, forestry, and fishing, as well as mining and quarrying, demonstrate minimal contributions to income tax, reflecting potential areas for growth and development.