Maldives to revise offshore tourism TGST rules following industry concerns

The government has decided to amend recently introduced tax rules requiring overseas tour operators, travel agencies and online booking platforms selling Maldives tourism products to pay Tourism Goods and Services Tax (TGST), Tourism Minister Mohamed Ameen said on Saturday.

Ameen said President Mohamed Muizzu had decided to make further changes to the Goods and Services Tax Act following concerns and submissions from tourism industry stakeholders and overseas travel companies.

The changes introduced in August require foreign tour operators, travel agents and online booking platforms without a fixed place of business in the Maldives to register for GST when supplying inbound tourism products or related booking and agency services. The provisions took effect on 1 October, with the existing tourism-sector GST rate of 17 per cent applying to those services.

Speaking at an event held on Saturday to mark Maldives Tourism Day, Ameen said concerns had been raised by a number of parties in the tourism industry following the introduction of the changes.

He said the President had received requests from industry stakeholders, travel agents and tour operators over the issue.

“Many requests have been sent to President [Mohamed Muizzu] by industry stakeholders and travel agents regarding this matter,” Ameen said.

“The President has now decided to make changes very soon to the TGST law concerning the destination principle. I wanted to inform you of this.”

Ameen did not provide details of the amendments the government intends to make or when they would be submitted.

Under the amendment ratified on 31 August, the Maldives applied the destination principle to inbound tourism products and related booking and agency services supplied by businesses without a fixed place of business in the country. MIRA defines inbound tourism products as accommodation, meals, transport and other tourist activities in the Maldives.

The changes have drawn concerns from overseas travel industry groups since their introduction.

The Indian Association of Tour Operators has asked the government to postpone implementation of the requirements for one year, citing concerns over compliance, existing bookings and the impact on businesses selling Maldives holidays.

An Italian tour operator, Kia Ora Viaggi, also suspended new Maldives bookings and sales from 1 October in response to the new tax framework, while saying it would honour bookings already confirmed.

The 17 per cent TGST rate itself is not new. The tourism-sector GST rate increased from 16 per cent to 17 per cent on 1 July 2025. The August 2026 amendment expanded the scope of the tax to cover specified overseas suppliers of Maldives tourism products and related services.

The government has described the amendment as part of applying the destination principle, under which taxation is based on where goods or services are consumed rather than where the supplier is established.