The Tourism Goods and Services Tax (TGST) in the Maldives has officially increased from 16 percent to 17 percent as of today, 1 July 2025. The change, part of the Seventh Amendment to the Goods and Services Tax Act, was ratified in November 2024 and applies to all tourism sector businesses including resorts, hotels, guesthouses, restaurants, liveaboards and travel agencies.
The adjustment means tourism establishments must ensure their pricing systems, booking platforms, accounting software, and point-of-sale systems are updated to reflect the new rate. All customer-facing rates must also include the updated 17 percent TGST from today onwards to ensure transparency and compliance.
One of the most important aspects of this change is understanding how to apply the correct rate based on the concept of “time of supply”. This refers to the date on which a good or service is considered supplied, and is determined by whichever occurs earlier: the date of the tax invoice or the date of payment. For example, if an invoice is issued or payment is received on or after 1 July 2025, the 17 percent rate must be applied, even if the actual service is delivered at a later date.
This approach means that for services already booked and paid for before 1 July, the previous 16 percent rate can still apply. In contrast, if a resort guest checks out after 1 July and receives their invoice on that date, the new rate takes effect. The same principle applies to restaurants and other service providers. For 24-hour businesses, the new rate must be applied from exactly midnight on 1 July, without exception. However, businesses that do not operate around the clock may still apply the old rate if the service was completed before midnight and the invoice reflects the earlier date.
MIRA has issued a detailed fact sheet with examples to help tourism businesses understand how these rules apply in real situations. The guidance is intended to prevent confusion and ensure businesses apply the correct rate to avoid penalties or customer disputes.
By adjusting systems accordingly, reviewing how invoices are timed, and training staff to correctly apply the rules, tourism businesses in the Maldives can navigate this transition smoothly and remain compliant with tax regulations.
