Italian Operator Calls for Wider Maldives Sales Freeze Over GST Rules

The managing director of Italian tour operator Kia Ora Viaggi has called on overseas travel businesses to freeze Maldives sales and promotion, widening her campaign against new GST obligations as objections spread across several of the country’s largest tourism markets. 

In a petition created on 1 October, Irene Faraon urged the Maldivian government and MIRA to suspend registration requirements for non-resident travel businesses and collect tourism taxes through local suppliers. She also called for diplomatic intervention by overseas governments and encouraged operators to direct customers towards competing destinations. 

The petition follows Kia Ora Viaggi’s statement on 23 September announcing a suspension of new Maldives sales and bookings from 1 October. The company disputes applying Maldivian tax obligations to its planning and advisory work in Italy and said it was working to protect confirmed bookings at agreed prices. 

Its withdrawal has already affected preparations for the winter season. In comments published by the Maldives Independent on 30 September, Faraon said the company had released uncommitted group flights and resort allotments and redirected marketing and customers towards destinations including Seychelles, Mauritius, Fiji and French Polynesia. 

The dispute has since widened within Italy. ASTOI Confindustria Viaggi said on 2 October that almost all its member operators had refused to register for GST in protest. The association requested repeal of the provisions affecting non-resident suppliers, or changes to their implementation.

Italy was the Maldives’ fifth-largest source market in the first nine months of 2026, supplying 98,039 tourists, or 6.2 per cent of arrivals, according to the Ministry of Tourism and Civil Aviation’s update for 1 October. Russia supplied 229,236 tourists, the United Kingdom 119,968 and Germany 99,062. Together, these four markets accounted for 546,305 tourists, approximately 34.8 per cent of the national total.

Tour operators’ importance also extends beyond the number of visitors from their home countries. They negotiate accommodation allocations, combine rooms with flights and transfers, distribute packages through travel agencies and spend on destination promotion. ASTOI says most Italian travellers to the Maldives purchase their holidays through organised tourism channels. 

Maldives Visitor Survey 2025 reported that about 65 per cent of surveyed resort guests used an international travel agency or tour operator to book accommodation, compared with 18 per cent booking directly with the resort. Respondents could select multiple channels, so the figures describe booking behaviour rather than a precise share of resort sales. 

British travel association ABTA has sought a postponement of at least six months to allow consultation. In a statement on 24 September, it said it had escalated its concerns to President Dr Mohamed Muizzu after writing twice to the tourism minister. European umbrella association ECTAA has also called for suspension of enforcement and dialogue. 

The reform follows the Eighth Amendment to the Goods and Services Tax Act, ratified on 31 August. It extends the existing 17 per cent tourism GST framework to inbound tourism products and related agency and booking services supplied by overseas businesses from 1 October. 

MIRA explains the measure through the destination principle, under which taxation follows where goods or services are consumed. Covered products include accommodation, meals, transport and tourist activities in the Maldives, with registration required regardless of a supplier’s turnover.

For overseas resellers, MIRA’s calculation generally taxes the difference between the amount received for the Maldives tourism product and the amount paid to a GST-registered supplier, after removing the tax component. Related agency and booking services are taxed on their fees. The rules therefore do not automatically add 17 per cent to the entire holiday price. 

Transitional protection applies where an invoice or receipt was issued, or full or partial payment was made, before 1 October. However, ASTOI says operators still face difficulties separating taxable package components, applying the rules across several intermediaries and adapting systems after prices and contracts have been agreed. 

The dispute comes as tourist arrivals remain below last year’s level. The Maldives received 1,571,977 tourists through September, down approximately 3.9 per cent from the same period in 2025. Those figures precede the overseas GST rules, but show the weaker arrival base against which operators are making their winter sales and marketing decisions.