Kolamaafushi MP Ibrahim Didi submitted a government bill to the People's Majlis in Malé on Tuesday, 20 October, seeking to repeal the amendment that requires foreign tour operators, travel agencies and offshore booking platforms to pay Tourism Goods and Services Tax (TGST).
The amendment, which brought the destination principle into the taxation of tourism services, was ratified by President Dr Mohamed Muizzu on 31 August and took effect on 1 October. Days later, Tourism Minister Mohamed Ameen announced that the President had decided to amend the law following concerns raised by industry leaders and travel agents.
The government had estimated that the change would bring in about MVR 1.6 billion in additional tax revenue a year. According to the government's estimates, MVR 299.3 million of that would have come from foreign travel agents and MVR 1.3 billion from foreign tour operators.
The tax drew objections from the Maldives Association of Travel Agents and Tour Operators (MATATO) and from tour operators in markets including Russia, India, France and Italy. MATATO said the amendment failed to recognise that bookings pass through several layers of global agents, consolidators and platforms. It warned that foreign agents could promote the Maldives less, that business could shift to other destinations, and that small and medium-sized Maldivian travel agencies that rely on foreign partners could be harmed.
The association also said the rules took effect after bookings and contracts for the coming tourist season had already been completed, adding financial and administrative burdens on local agents. It described the requirement for Maldivian agents to provide detailed information about their foreign business partners for tax purposes as intrusive and risky for commercially sensitive data.
Parliament has not yet voted on the bill. Until a repeal is passed and ratified, the amendment remains in law.