President Dr Mohamed Muizzu has announced a series of new economic measures aimed at strengthening small and medium-sized enterprises across the Maldives, including plans to increase the mandatory Goods and Services Tax registration threshold from MVR 1 million to MVR 1.5 million from 1 January 2027.
Speaking at the Maldives Expo 2026 Awards Ceremony held at Barceló Nasandhura on Saturday evening, President Muizzu outlined a package of initiatives covering taxation, government payments, international transactions, import duties, regional business concessions and access to financing. The measures are expected to be introduced in stages between November 2026 and January 2027 as part of the government’s wider efforts to create a more supportive environment for entrepreneurs and locally established businesses.
Under the proposed GST reform, businesses would only be required to register for GST once their taxable turnover reaches MVR 1.5 million, compared with the current threshold of MVR 1 million. The change is expected to reduce administrative and financial pressures on smaller businesses, allowing them greater flexibility to focus on growth, employment and expansion. President Muizzu said the necessary legislative and regulatory amendments would be introduced to implement the revised threshold.
The government has also decided to introduce a mechanism allowing SMEs to offset outstanding payments owed to them by the state against their tax liabilities. The measure is designed to address cash-flow challenges faced by businesses that have supplied goods or services to government institutions but are still awaiting payment while simultaneously being required to meet tax obligations.
President Muizzu also announced that Addu City will become the first location to implement the government’s three-year SME concession zone pilot programme from 1 January 2027. Businesses operating within the programme are expected to benefit from incentives including income tax exemptions and rent waivers during the first year for enterprises operating on government-leased land. The Addu City initiative was initially outlined in this year’s Presidential Address, with the Ministry of Economic Development expected to announce further details of the concession framework.
Additional support is being introduced to improve the ability of Maldivian businesses to participate in international commerce. From 1 November, local SMEs will be able to receive US dollar payments through the Bank of Maldives Gateway. Arrangements will also allow eligible businesses to use those funds to make payments for goods and services purchased from overseas suppliers, helping companies manage international transactions more efficiently.
The government is further preparing to introduce zero import duties on raw materials brought into the Maldives by SMEs for production purposes from 1 January 2027. The initiative is expected to reduce production costs for local businesses, encourage domestic manufacturing and value addition, and improve the competitiveness of Maldivian products. Legislative amendments required to implement the measure are currently being prepared.
President Muizzu also confirmed that the second phase of the government’s youth loan scheme will be launched in November, providing further financing opportunities for young entrepreneurs and individuals seeking to establish or expand businesses. He additionally reaffirmed the government’s commitment to ensuring that persons with disabilities are provided equal opportunities to participate in economic activities and benefit from the country’s development.
The latest initiatives reflect the administration’s focus on creating a business environment in which SMEs can grow with reduced financial pressure, improved access to foreign currency transactions and greater opportunities for investment. With small and medium-sized businesses playing an important role in employment, regional development and entrepreneurship across the Maldives, the measures are expected to provide additional momentum to the country’s private sector and support broader economic growth.
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