Maldives government has started levying GST ( Goods and Services Tax ) under its new plan on economic reforms on Taxation. Starting from this month, October 2, the government will charge GST on almost all products and services, except some of the essential products for day to day needs. Lets look into details of this new and historical taxation started just 2 days ago.
What is GST?
GST is the abbreviation used for Good and Services Tax. GST is levied on most goods and services, that are either imported or produced within the country. ( see Maldives Goods and Service Act for details ). GST is added to price of taxable goods and services at a rate fixed by the government or under Goods and Services Act. GST was first introduced in France and now more than 150 countries around the world have implemented GST.
What is GST in Maldives?
Maldivian Parliament passed the Goods and Services Act earlier this year and under which, Government gets the authority to impose new GST from businesses on a fixed rate.
What are categories of GST levied in Maldives? ( source: MIRA- Maldives Inland Revenue Authority )
They include:
- Tourism Goods and Services Tax
- General Goods and Services Tax
What are the rates charged for GST?
Tourism goods and services tax
• 3.5% from 02 October 2011 to 31 December 2011;
• 6% from 1 January 2012 to 31 December 2012;
• 8% from 1 January 2013 onwards
General goods and services tax
• 3.5% from 02 October 2011 to 31 December 2011;
• 6% from 1 January 2012 onwards
What are the goods that cannot charge GST?
There are certain goods that businesses cannot charge GST as according to the Goods and Services Act. They includes the following:
- Rice
- Sugar
- Flour
- Salt
- Milk
- Cooking Oil
- Eggs
- Tea Leaves
- All kinds of fruits
- Bread , buns, and Faaroshi ( rusk )
- Cooking gas
- Deep sea fish, reef fish, all types of fish packed in the Maldives, and rihaakuru(fish paste)
- Potatoes, onions
- Ingredients used in making curry paste (cumin, fennel, coriander, turmeric, garlic, ginger, chilli, chilli powder, cinnamon, cardamom, peppercorn, any other such ingredient)
- Dhiyaahakuru, coconuts (kaashi, kurun’ba, kurolhi)
- Carrots, cabbage, beans and tomatoes among vegetables
- Diesel
- Petrol
- Baby diapers
- Baby food
What are the Services that exempt GST charges?
- Electricity services provided by an electricity service provider registered with the relevant Government Authority or State Institution;
- Water facilities provided by a water supplier registered with the relevant Government Authority or State Institution;
- Telecommunication services provided by a telecommunication service provider registered with the relevant Government Authority or State Institution;
- Sewerage facilities provided by a sewerage supplier registered with the relevant Government Authority or State Institution;
- Education provided by an educational institution registered with the relevant Government Authority or State Institution;
- Health services provided by a health service provider registered with the relevant Government Authority or State Institution;
- Services specified in the GST Regulation, made pursuant to GST Act, that facilitate and are essential for the provision of services stipulated in Sections 20(a) to 20(f) of the GST Act;
- Medical devices stipulated in the GST Regulation, and drugs authorised for sale by the relevant Government Authority that are supplied by a pharmacy registered with the relevant Government Authority or State Institution;
- Sale of goods received as donations or gifts by a voluntary body or association registered with the relevant Government Authority or State Institution;
- Financial services stipulated in the GST Regulation;
- Rent earned from lease of immovable property;
- International transportation services;
- Goods and services supplied to Persons exempted from GST by another Act;
- Payments collected as fines.
Who needs to register for GST?
2. Persons whose estimated taxable supplies for the following 12 (Twelve) months exceed MVR 1,000,000 (One Million Rufiyaa);
3. Notwithstanding the Persons above, the following entities;
- Tourist Establishments (Tourist resorts, tourist hotels, guest houses, picnic islands, tourist vessels and yacht marinas authorised by the Tourism Ministry);
- Diving schools, shops, spas, water sports facilities and any other such facilities being operated on the establishments specified above;
- Travel agency service providers authorised by the Tourism Ministry;
- Agents providing goods and services to foreign tourist vessels entering the Maldives;
- Domestic air transportation service providers.
4. Persons importing goods into the Maldives;
5. Persons which do not fall within the categories specified above may also register with the MIRA (voluntary registration).
For more info on Maldives GST visit MIRA
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