The People’s Majlis has passed an amendment to the Goods and Services Tax Act that will bring offshore booking platforms, foreign tour operators and overseas travel agents serving the Maldives within the country’s GST framework.
The government-sponsored bill, introduced by Kulhudhuffushi North MP Mohamed Dawood of the ruling PNC, was approved with 54 votes in favour among the 57 lawmakers present.
Two MPs voted against the amendment: opposition MDP MP Abdul Ghafoor Moosa, who represents Hanimaadhoo, and Keyodhoo MP Mohamed Niushad. MDP MP for Hulhumalé South, Dr Ahmed Shamheed, joined PNC lawmakers in voting for the legislation.
The reform seeks to close a significant gap in the existing tourism tax system by introducing the “destination principle”. Under the approach, relevant goods and services supplied for consumption in the Maldives can be brought within the GST system even when the businesses providing or facilitating them operate overseas.
The expanded framework covers offshore booking platforms, foreign tour operators and overseas travel agents, businesses that play a major role in selling Maldivian tourism products to international travellers.
The legislation establishes the legal framework needed to collect GST from these foreign businesses while also introducing changes intended to address existing administrative challenges and improve the efficiency and robustness of the country’s tax system.
According to projections accompanying the bill, the reforms are expected to generate approximately MVR 1.61 billion in additional state revenue annually.
Of this, around MVR 299.3 million is expected to come from foreign travel agents, while approximately MVR 1.31 billion is projected to be collected from foreign tour operators.
The amendment represents a significant effort to patch gaps that have allowed portions of the value generated from selling Maldivian tourism products overseas to remain beyond the effective reach of the domestic GST system.
By applying the destination principle, the government aims to create a more equitable tax environment between businesses operating domestically and foreign companies generating income from tourism products and services consumed in the Maldives.
The legislation also contains several additional amendments aimed at simplifying implementation and strengthening tax administration.
Under the approved bill, GST collection from the newly covered foreign tourism businesses is scheduled to begin on October 1, 2026.
