Foreign booking platforms, tour operators and travel agents selling Maldives holidays could be required to pay Tourism Goods and Services Tax (TGST) under new amendments proposed by the government, as Parliament begins considering changes aimed at expanding the country’s tax base.
Debate on the government-sponsored bill began in the People’s Majlis on Sunday, with the proposed legislation seeking to establish a mechanism for collecting GST from foreign companies providing tourism booking and related services connected to the Maldives.
The bill was submitted on behalf of the government by Kulhudhuffushi North MP Mohamed Dawood.
According to the proposal, the changes are intended to address gaps and practical challenges in the existing tax collection framework, particularly where tourism-related services are provided by companies operating outside the Maldives.
If approved, the legislation would bring offshore booking platforms, foreign tour operators and travel agents within the country’s GST framework for qualifying services related to tourists travelling to the Maldives.
Government estimates presented with the bill project a significant increase in state revenue once the new arrangements are implemented.
The proposed changes are estimated to generate an additional MVR 16 billion annually, including approximately MVR 299.3 million from foreign travel agents and MVR 13 billion from foreign tour operators.
During Sunday’s debate, lawmakers from the ruling People’s National Congress (PNC) argued that the legislation would allow the Maldives to capture a greater share of the economic value generated internationally from its tourism industry.
Funadhoo MP Mohamed Mamdhooh said foreign companies currently generate revenue by selling and facilitating holidays based on Maldivian tourism products while part of that economic activity remains outside the domestic tax system.
“I believe this amendment will, God willing, put an end to the current situation where entities generate revenue using the Maldives’ resources without any benefit flowing to our beloved citizens,” Mamdhooh said.
He stressed that the proposed changes should not be viewed as an increase in existing tax rates, describing the measure instead as an expansion of the tax base to include businesses currently outside its reach.
The proposal also received support in principle from some opposition Maldivian Democratic Party (MDP) lawmakers.
Opposition members who spoke during the debate acknowledged the case for collecting taxes from foreign tour operators benefiting from the Maldivian tourism industry, while calling for careful consideration of how the new system would be implemented.
Kendhoo MP Mauroof Zakir said he supported the principle behind the legislation but urged Parliament to consult tourism businesses before approving the amendments.
He said lawmakers should have a clear understanding of how the changes could affect businesses operating within the industry and ensure appropriate procedures are established before implementation.
The proposed changes are particularly significant given the structure of the Maldivian tourism industry.
A substantial portion of international holiday bookings for Maldivian resorts and guesthouses is facilitated through overseas travel agencies, tour operators and online booking platforms. These companies play an important role in connecting the country’s tourism establishments with travellers across major international source markets.
Tourism is the Maldives’ largest economic sector and a major source of government revenue and foreign currency earnings.
TGST is levied on goods and services supplied by businesses operating within the tourism sector and forms one of the government’s largest individual sources of tax revenue.
Figures for the first half of 2026 showed that TGST collections reached approximately USD 431.4 million, up 7.9 percent from USD 399.7 million during the corresponding period in 2025.
The latest bill seeks to extend the reach of that tax framework to more of the overseas businesses involved in selling and facilitating Maldivian tourism services.
With debate now underway, Parliament will have to consider both the government’s projected revenue gains and concerns from within the tourism industry over how the system would operate in practice.
