Parliament accepts bill to reverse 17% GST on foreign travel agents

Parliament on Monday accepted a government-sponsored bill seeking to repeal provisions of the Goods and Services Tax (GST) Act that introduced a 17% tax on services provided by foreign booking platforms, travel agencies and tour operators from the beginning of October.

The bill was accepted with the support of all 43 MPs who participated in the vote, including members of the opposition Maldivian Democratic Party (MDP). No MPs voted against it.

The proposed amendment follows concerns raised by overseas tour operators and tourism industry stakeholders over the introduction of the tax.

President Mohamed Muizzu ratified the amendment introducing the 17% tax on offshore booking platforms, foreign travel agencies and tour operators on 31 August.

The tax came into effect on 1 October, extending the application of Tourism Goods and Services Tax (TGST) to services provided by these businesses.

However, following objections from tour operators and other industry representatives, the government announced that it would seek further changes to the legislation.

The latest amendment was submitted on behalf of the government by Kolamaafushi MP Ibrahim Didi.

Under the proposed changes, all provisions previously introduced to impose GST on foreign tour operators and booking platforms would be removed from the law, effectively reversing the tax introduced this month.

The bill also includes amendments intended to strengthen the powers of the Maldives Inland Revenue Authority (MIRA) to take action against individuals and businesses engaged in GST evasion.

The government had previously announced its decision to revise the legislation following concerns expressed by foreign tour operators and other stakeholders in the tourism sector.

The bill will now proceed through the parliamentary legislative process before it can be approved and submitted for presidential ratification.