The Maldives has expanded the scope of its Goods and Services Tax framework to include foreign tour operators supplying or facilitating tourism products connected to the country, strengthening the government’s efforts to broaden the national revenue base while maintaining the existing tax structure for locally registered businesses and consumers.
The legislative amendment to the Goods and Services Tax Act, ratified by President Dr Mohamed Muizzu on 31 August, establishes a formal mechanism through which foreign entities previously operating outside the domestic GST system can be registered and brought within the country’s tax framework. The Maldives Inland Revenue Authority said the amendment is intended to improve revenue collection from economic activity already associated with the Maldivian tourism industry rather than introduce a new tax or increase existing GST rates for local citizens.
The reform is particularly significant for the Maldives, where international tourism remains one of the principal drivers of economic activity, foreign exchange earnings, investment and government revenue. A substantial share of bookings for Maldivian resorts, hotels, guesthouses and other tourism services is arranged through international travel companies, digital booking platforms and overseas tour operators. By establishing clearer tax obligations for foreign entities participating in these transactions, the government is seeking to ensure that the taxation framework more comprehensively reflects the value generated through the country’s tourism industry.
Nafa Waheed, Director General for Large Taxpayer and International Tax Audit at the Maldives Inland Revenue Authority, explained that the amendment primarily brings entities that had not previously entered the GST system within a formal registration and collection mechanism. Speaking on PSM News’s ‘Raajje Miadhu’ programme, she said the updated legislation enables the authority to register such entities and collect GST on goods and services that fall within their taxation obligations.
Under the revised framework, GST will apply where a business without a permanent taxable establishment in the Maldives supplies an inbound tourism product or facilitates the booking of such a product. The scope includes tourist accommodation as well as other tourism-related goods and services associated with travel to the Maldives.
The provision is expected to strengthen the alignment between the country’s taxation system and the increasingly international structure of tourism distribution. Maldivian resorts and other accommodation providers market their products across a broad global network comprising traditional tour operators, travel agencies, online intermediaries and booking platforms. Ensuring appropriate tax treatment throughout this international distribution network supports a more comprehensive revenue system while allowing the Maldives to continue benefiting from the global reach of its tourism industry.
MIRA has emphasised that the amendment does not alter the obligations of businesses that are already registered for GST in the Maldives. Existing GST rates applicable to goods and services supplied domestically remain unchanged, while current filing arrangements and procedures for registered taxpayers will continue under the existing system.
Nafa said businesses already registered with MIRA will therefore not experience changes to the GST charged on their goods and services or to the GST returns they are required to submit. Registered taxpayers have been advised to continue completing their administrative and tax-related procedures through the MIRAconnect platform in accordance with existing requirements.
The government has positioned the amendment as a targeted revenue-strengthening measure focused on ensuring that international businesses benefiting from Maldivian tourism activity are appropriately incorporated into the national taxation framework. President Muizzu said following the ratification that the measure is specifically tailored to the tourism sector and is expected to contribute positively to state revenue.
The expansion of the GST framework comes as the government continues efforts to strengthen public finances while protecting the competitiveness of one of the country’s most important economic sectors. Rather than increasing taxation on existing domestic businesses and citizens, the policy broadens the number of taxable entities involved in providing and facilitating tourism services connected to the Maldives.
For the country’s internationally recognised resort industry, the development also reflects the growing importance of maintaining a modern tax environment capable of addressing cross-border commercial arrangements. Resorts in the Maldives attract travellers through extensive international sales and distribution networks, and foreign travel companies remain important partners in connecting the destination with established and emerging source markets.
By strengthening the taxation framework surrounding these transactions, the government aims to ensure that the continued growth and international success of Maldivian tourism translates more effectively into sustainable public revenue. The additional revenue potential can further support national development priorities while preserving the Maldives’ position as one of the world’s leading island tourism destinations.
The amendment also reinforces the government’s broader objective of improving fiscal sustainability through stronger revenue administration, wider compliance and greater participation in the tax system. Integrating foreign tour operators into the GST framework provides the Maldives with a more structured mechanism for capturing revenue generated through international tourism transactions without altering the GST obligations currently applied to locally registered businesses.
With tourism continuing to serve as the backbone of the Maldivian economy, the revised framework is expected to provide the state with a more comprehensive and internationally relevant taxation mechanism while supporting the long-term development, resilience and competitiveness of the country’s tourism and resort industry.
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