- Destination Future urges the government to delay the 1 October implementation of new TGST obligations on overseas tourism businesses, citing an inadequate one-month transition period.
- The Eighth Amendment extends the 17 percent TGST to offshore booking platforms, foreign tour operators and travel agents, applying mainly to their added margin after deducting payments to registered Maldivian suppliers.
- The organisation warns that pre-agreed 2026/27 winter season contracts and prices could be disrupted, with costs potentially absorbed by operators, and raised concerns over data requests about overseas commercial partners.
Destination Future has called on the government to reconsider the October implementation of new tax obligations for overseas tourism businesses, warning that the short transition period could disrupt existing contracts and affect the international distribution of Maldivian holidays.
The non-governmental organisation raised its concerns in a statement addressing the Eighth Amendment to the Goods and Services Tax Act. The amendment, ratified on 31 August, extends the Tourism Goods and Services Tax framework to qualifying offshore booking platforms, foreign tour operators and overseas travel agents selling Maldives tourism products.
Under the new framework, affected overseas businesses will be required to account for 17 percent TGST from 1 October. Destination Future said its concerns relate primarily to the implementation process and timing, rather than the principle of taxing consumption at its destination.
The organisation noted that resorts and other registered tourism suppliers already pay TGST on their taxable supplies. Under the amendment, the taxable value for an offshore seller is generally calculated after deducting amounts payable to registered Maldivian suppliers from the consideration received.
This means the new liability is intended to apply mainly to the additional value or margin generated by the offshore business, rather than imposing TGST again on the full value of accommodation already taxed in the Maldives.
However, Destination Future argued that the one-month period between ratification and implementation leaves overseas businesses with limited time to understand the legislation, determine whether it applies to their operations, register with the tax authority and make changes to accounting, reservation and pricing systems.
The organisation also noted that implementing regulations may be developed during the same period in which businesses are expected to prepare for compliance. It said businesses could therefore be required to make operational decisions before the complete regulatory framework and detailed guidance are available.
The timing is particularly significant because contracts and prices for the 2026/27 winter tourism season have already been agreed in many markets. Tour packages have been advertised, advance bookings have been accepted and agreements have been entered into with travellers.
Destination Future warned that businesses may be unable to pass the additional cost to customers with confirmed bookings. The cost could instead be absorbed by overseas operators, reflected in negotiations with Maldivian suppliers or incorporated into future holiday prices.
The statement also raised concerns over requests for Maldivian tourism businesses to submit information about their overseas commercial partners shortly after the amendment was ratified. According to Destination Future, the information reportedly included company names, registration details, countries of incorporation and contact information.
While recognising that the tax authority requires information to administer the law, the organisation said commercial partner databases can contain sensitive information developed through years of business relationships. It called for clear safeguards, proportionate reporting requirements and adequate time for companies to comply.
Destination Future referred to tax systems in the United Kingdom, Singapore, New Zealand and Australia as examples of jurisdictions that use measures such as margin-based taxation, registration thresholds, transitional provisions and extended consultation periods. It acknowledged that these systems are not directly comparable to the Maldives but said they demonstrate the importance of preparation when tax obligations are extended to overseas businesses.
The organisation has proposed delaying implementation until detailed regulations and guidance are published and a simplified registration mechanism is operational. It also called for transitional treatment for existing bookings, consideration of thresholds for smaller sellers and stronger protections for commercially sensitive information.
Destination Future further recommended an independent assessment of the reform’s potential effects on government revenue, tourism prices, visitor arrivals, overseas marketing and the competitiveness of the Maldives.
