As of 1 July 2025, an updated Tourism Goods and Services Tax (TGST) rate has officially come into effect across the Maldives, following the enactment of the Seventh Amendment to the Goods and Services Tax Act (Law No. 20/2022). The revision raises the TGST rate from 16% to 17%, impacting all tourism-related transactions occurring on or after this date.
The Maldives Inland Revenue Authority (MIRA) has formally notified all registered tourism establishments, ranging from resorts, guesthouses, and hotels to liveaboards and other service providers, to ensure their invoicing systems and accounting practices are updated to reflect the revised rate. The amendment applies specifically to transactions where the “time of supply” occurs on or after 1 July 2025.
For 24-hour operating businesses such as resorts, MIRA has clarified that any tourism goods or services supplied before midnight of 1 July will remain subject to the previous 16% TGST rate. However, supplies delivered after midnight will be taxed at the new 17% rate. MIRA has urged these businesses to precisely demarcate transactions occurring before and after the transition point to ensure full compliance.
This incremental increase in the TGST is expected to bring an estimated additional USD 13.2 million in revenue to the government in the current fiscal year. These funds are likely to contribute towards strengthening the country’s public finances and supporting infrastructure development, especially those related to sustainable tourism and service improvements.
The TGST is a crucial component of the Maldives’ tax revenue, given the central role that tourism plays in the national economy. With tourism contributing over 70% of foreign exchange earnings and accounting for a substantial portion of GDP, tax policy changes in this sector have both domestic and international relevance.
The Seventh Amendment to the GST Act is part of broader fiscal reforms introduced by the government to enhance revenue generation while maintaining the Maldives’ competitiveness as a world-renowned luxury travel destination. Tourism stakeholders are encouraged to review the official Tax Ruling TR-2023/G45 issued by MIRA for further guidance on implementation and compliance procedures.
Visitors planning holidays to the Maldives are unlikely to see major cost differences, as the change represents a marginal 1% increase. However, the adjustment reinforces the Maldives’ commitment to responsible fiscal management while continuing to offer the pristine experiences and high-quality service for which the destination is globally recognized.
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