The Maldivian parliament’s committee has voted against proposed exemptions that would have prevented smaller regional airports and guesthouses from facing increased departure and green tax fees. This decision supports the government’s broader initiative to adjust tax rates across the tourism and aviation sectors to boost public revenue.
Departure Tax Hike Across All Airports
The government has proposed an increase in the departure tax for international passengers departing from all Maldivian airports, including Velana International Airport (VIA). The proposed adjustments would see foreign passengers in economy class paying $50, up from $30, while business class passengers would see their fees double to $120. First-class and jet passengers would face significant hikes, with rates climbing from $90 to $240 and from $120 to $480, respectively. Maldivian citizens departing in economy class would remain unaffected by the increases.
The opposition Maldivian Democratic Party (MDP), led by MP Ameen Faisal, proposed an amendment to exempt all airports outside of VIA from the increased departure tax. Faisal argued that such an exemption would support smaller regional airports, encouraging international travel to these locations and stimulating development in the broader tourism economy. He emphasised that while the exemption would bring minimal revenue impact, it could offer substantial benefits for regional connectivity and investment. However, the committee ultimately rejected the amendment, with 68 members voting against it and only 11 in favour.
Green Tax Hike to Affect Smaller Guesthouses
In a similar decision, the committee rejected an amendment aimed at exempting guesthouses with fewer than 25 rooms from a planned green tax increase. Currently, the green tax stands at $3 per day for hotels and guesthouses with up to 50 rooms, but under the new proposal, this will rise to $6 per day. Larger establishments, including resorts and city hotels, will see their green tax doubled from $6 to $12 per day.
The proposal to maintain the green tax at $3 for smaller guesthouses was introduced by Kendhoo MP Mauroof Zakir, who argued that such an exemption would benefit smaller establishments and support budget tourism in the Maldives. MDP Parliamentary General Leader Ibrahim Nazil expressed support for the amendment, highlighting that it would aid in keeping costs manageable for smaller operators. Despite these arguments, the committee rejected the amendment with 68 votes against and 11 in favour, passing the bill in its original form.
Additional Tax Revisions Ahead
The committee also approved three additional government proposals, including a rise in the Tourism Goods and Services Tax (TGST) from its current rate to 17%, effective from June next year. These tax reforms align with the government’s strategy to increase public revenue through adjustments within key economic sectors.
The departure tax and green tax bills will proceed to a full parliamentary vote. Should the bills pass, they will be sent to the president for ratification and will come into effect upon endorsement.
