President Dr Mohamed Muizzu has ratified a set of amendments that will raise key tourism-related taxes and fees, effective at various dates in 2024 and 2025. This move forms part of a broader fiscal strategy aimed at narrowing budget deficits and enhancing foreign currency inflows.
Changes in Tourism Sector Goods and Services Tax (TGST)
The Tourism Goods and Services Tax (TGST), currently set at 16%, will rise to 17% on 1 July 2025. To support the transition, the amendment provides a seven-month period for businesses in the tourism sector to adapt to the new rate. Additionally, the amendment expands eligibility for general sector GST registration to include staff cafés that cater exclusively to employees within tourist establishments, which previously applied only to staff shops.
Revised Green Tax Structure
Starting from 1 January 2025, adjustments to the Green Tax (GRT) will impact guests based on their accommodation type. Tourists at resorts, integrated resorts, resort hotels, and tourist vessels will be charged USD 12 per day. For hotels and guesthouses located on inhabited islands, guests staying in establishments with over 50 rooms will also pay USD 12 per day, while those in smaller facilities with 50 rooms or fewer will be charged USD 6. Additionally, the amendment exempts infants under two years of age from the Green Tax.
Updated Airport Departure Tax and Airport Development Fee
From 1 December 2024, Departure Tax and the Airport Development Fee (ADF) will see a significant hike, particularly affecting foreign travellers and premium travel classes. For foreign passengers departing in economy class, the departure tax will increase from USD 30 to USD 50, while business and first-class passengers will see new rates of USD 120 and USD 240, respectively. Private jet passengers will face a fee of USD 480, up from the previous USD 120. Rates for Maldivian economy-class passengers will remain unchanged, although other travel classes will experience similar increases.
In addition to rate changes, provisions have been introduced to facilitate the refund of any excess or incorrect airport taxes and fees collected, with such refunds processed through the Maldives Inland Revenue Authority (MIRA).
The amendments officially took effect on 5 November 2024. Regulatory guidelines detailing the implementation of these amendments are set to be published within 30 days to support compliance.
