Gov’t Plans Urgent GST Changes After Overseas Tourism Industry Objections
- The government plans urgent GST Act amendments after overseas travel businesses objected to new tax requirements, with President Muizzu deciding to revise deadlines and procedures while retaining the destination principle.
- The Eighth Amendment extended the 17% TGST to inbound tourism products and overseas agency and booking services from 1 October, prompting Italian operators, ABTA, ECTAA and ASTOI to protest, refuse registration or demand postponement.
- The objections stem from key source markets—Russia, the UK, Germany and Italy supplied 546,305 tourists (about 34.8% of arrivals) through September—though no timetable or specific changes were detailed.
- Minister Ameen also highlighted Visit Maldives Year 2027 as an opportunity to boost the country's tourism competitiveness.
The government plans urgent changes to the Goods and Services Tax (GST) Act following objections to new tax requirements for overseas travel businesses, Minister of Tourism and Civil Aviation Mohamed Ameen has said.
Speaking at a National Tourism Day event on Saturday evening, 3 October, Minister Ameen said President Dr Mohamed Muizzu had decided to amend the legislation after receiving proposals from tourism stakeholders and travel agents. He said their concerns centred mainly on deadlines and procedural requirements.
The announcement follows growing resistance to the Eighth Amendment to the GST Act, ratified on 31 August 2026. The amendment extended the existing 17 per cent Tourism Goods and Services Tax (TGST) framework to inbound tourism products and related agency and booking services supplied by overseas businesses from 1 October.
Italian operator Kia Ora Viaggi announced on 23 September that it would halt new Maldives sales and bookings from 1 October. Its Managing Director, Irene Faraon, subsequently launched a petition calling for suspension of overseas registration requirements and urging other travel businesses to freeze Maldives sales and promotion.
Italy’s tour operator association ASTOI Confindustria Viaggi said on 2 October that almost all its member operators had refused GST registration in protest. It raised concerns about identifying taxable package components, applying the rules across several intermediaries and changing systems after prices and contracts had been agreed.
British travel association ABTA has requested a postponement of at least six months to allow consultation with the international travel industry. European umbrella association ECTAA has also called for suspension of enforcement and dialogue over the rules.
MIRA explains the reform through the destination principle, under which taxation follows where goods or services are consumed. Overseas resellers generally account for GST on their selling margins for Maldives tourism products, while related agency and booking services are taxed on their fees.
The objections involve businesses in important source markets. Russia, the United Kingdom, Germany and Italy together supplied 546,305 tourists through September, accounting for approximately 34.8 per cent of total tourist arrivals, according to the Ministry’s figures.
Minister Ameen’s remarks did not specify which deadlines or procedures would change, or provide a timetable for the proposed amendments. His announcement indicated that the government intended to retain the destination principle while addressing industry concerns.
He also referred to Visit Maldives Year 2027, describing the campaign as an opportunity to promote the country’s tourism achievements and improve its international competitiveness.
