The Maldives Association of Travel Agents and Tour Operators (MATATO) has endorsed the recent cabinet decision to collect corporate income tax in US dollars for income earned in the same currency, calling it a crucial reform for the Maldivian economy.

In a statement released on Tuesday, MATATO emphasized its support for the tax collection shift, noting that it is not opposed to the implementation but is focused on ensuring that the changes align with the practical realities of the tourism sector.

“MATATO is not opposed to the collection of tax in US dollars (USD). Our focus is on ensuring that the implementation of these reforms aligns with the practical realities of the tourism sector,” the statement said.

MATATO acknowledged the significance of the reform, highlighting that it supports the government’s broader fiscal objectives. The association believes that collecting tax in USD for income earned in USD is imperative and will positively impact the Maldivian economy.

The association also expressed its commitment to collaborating with the government to ensure that amendments to the GST Act benefit the Maldivian economy while protecting the interests of the tourism sector. MATATO looks forward to ongoing dialogue and cooperation with stakeholders to achieve shared goals.

MATATO praised President Dr. Mohamed Muizzu’s “forward-thinking vision and strategic approach” in addressing the current economic challenges in the Maldives. The association expressed its support for the government’s fiscal reform agenda, which aims to reduce recurrent expenditure and introduce cost-saving measures for the financial stability and sustainability of the economy.

Earlier this week, the Maldivian cabinet approved new measures designed to increase dollar revenue streams, including the collection of corporate income tax in USD from companies earning in USD, as part of efforts to alleviate the country’s dollar shortage.