The Maldives Government has decided to reverse recent amendments to the Goods and Services Tax Act that required foreign tour operators to pay Tourism Goods and Services Tax, with Parliament expected to approve the proposed changes within the next one to two weeks, Minister of Tourism and Civil Aviation Mohamed Ameen has said.
Speaking at a press conference held during the World Travel Market, Minister Ameen said the Government had decided to remove the destination principle introduced for TGST, restoring the previous arrangement under which foreign tour operators were not required to pay the tax.
The amendment is expected to provide greater clarity and confidence for international tour operators, travel partners and tourism businesses working with the Maldives, while strengthening the country’s position as one of the world’s leading island destinations. International tour operators play an important role in connecting travellers from key global markets with Maldivian resorts, hotels, guesthouses and other tourism service providers.
Minister Ameen said resorts, hotels and tourism operators in the Maldives generally comply with local laws and regulations. However, he noted that there had been cases where some operators were not providing services at fair market prices, creating the need for appropriate mechanisms to ensure transparency and fairness within the taxation system.
The Government had initially introduced a 17 per cent TGST requirement for foreign tour operators following recommendations from international financial institutions. The measure came into effect on 1 October after amendments to the relevant legislation, and more than 100 major tour operators subsequently registered with the Maldives Inland Revenue Authority.
Following concerns raised by the tourism industry, the Government reviewed the measure and decided to restore the previous tax arrangement. Minister Ameen said the decision was taken after extensive consultations involving the Ministry of Tourism and Civil Aviation, Ministry of Finance and Public Enterprises, Attorney General’s Office, Commissioner General of Taxation, MIRA and representatives of the tourism industry.
The proposed amendment has now been submitted to the relevant parliamentary committee, and Minister Ameen expressed confidence that Parliament would pass the bill within one to two weeks, bringing the matter to a resolution.
While the foreign tour operator TGST requirement is set to be removed, MIRA will retain the authority to determine fair market prices where necessary. The Minister said the tax authority would be able to establish appropriate values if resort operators declared prices for TGST purposes that were below actual market rates.
The decision reflects the Government’s policy of maintaining close engagement with tourism businesses, investors, development partners and industry stakeholders while ensuring that the regulatory environment remains supportive of sustainable sector growth.
With the Maldives continuing to attract travellers seeking premium island experiences, private villas, world-class hospitality and distinctive resort offerings across its atolls, maintaining a competitive and predictable business environment remains central to the country’s tourism strategy. Minister Ameen reaffirmed that the Government would continue working with the industry to ensure that businesses operating in the tourism sector do not face unnecessary difficulties while protecting the integrity of the country’s tax system.
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