Parliament passes tourism tax, airport fee hike
This measure is intended to bolster funding for environmental initiatives, reflecting the nation’s commitment to sustainable tourism.
Parliament on Thursday passed a series of bills to increase airport departure fees, the Tourism Goods and Services Tax (TGST), and the Green Tax, all aimed at enhancing government revenue from the tourism sector.
These bills, proposed by the government, received final approval following modifications by the finance committee and the economic committee.
The three bills passed by parliament include:
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1-
Airport departure taxes and fees bill: This bill increases the fees charged to passengers departing from Maldivian airports.
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2-
TGST increase bill: This bill raises the Tourism Goods and Services Tax.
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Green tax increase in the Tourism Act: This bill doubles the green tax for various types of tourist accommodations.
The TGST bill received 70 votes in favour, while 8 members voted against.
The Tourism Act bill and the Airport Departure Taxes and Fees Bill were both passed with 71 votes in favour and 8 against. MPs affiliated with the Maldivian Democratic Party (MDP) opposed all three bills.
The finance and economic committees made a few amendments to the proposed bills, aligning them for implementation as follows:
TGST increase
The TGST, a key revenue source for the tourism industry, will rise from 16% to 17%.
This increase is set to take effect in July 2025, allowing businesses time to prepare for the change.
Green Tax adjustment
The green tax, an environmental levy applied to tourists, will see a significant hike:
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For guesthouses with fewer than 50 rooms, the rate will double from $3 to $6 per guest per night.
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For resorts, city hotels, and other establishments with more than 50 rooms, the rate will increase from $6 to $12 per guest per night.
The new rates are scheduled to take effect in June 2025.
Increased airport departure fees
The Airport Departure Taxes and Fees Bill will raise departure fees for foreign travellers across various classes, with no increase for economy class passengers. The revised rates are as follows:
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Economy class (Foreigners): Increased from $30 to $50
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Business class: Increased from $60 to $120
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First class: Increased from $90 to $240
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Private jet passengers: Increased from $120 to $480
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