News Desk
MALE’, Maldives – The Majlis economic affairs committee has unanimously approved a series of government-proposed bills to increase tourism-related taxes and fees.
The key changes include:
- Tourism Goods and Services Tax (TGST) rising from 16% to 17% starting June 2024
- Green tax on tourists increasing from $6 to $12 per person
- Airport development fee and departure tax for foreigners in economy class going up from $30 to $50
- For Business class rising 100% to $120, and first class fares up 165% to $240
- For Private jets, surging 300% to $480
These significant tax hikes are expected to boost government revenue substantially – from 201.9 million rufiyaa ($13 million) next year to 538.4 million rufiyaa ($35 million) by 2027.
While the additional funds could strengthen the Maldives’ fiscal position and enable infrastructure development or sustainability initiatives, experts warn the moves could impact the destination’s tourism competitiveness. Analysts caution the price increases may deter budget travelers and strain smaller tourism businesses like guest houses.
Reinvesting the new tax revenue strategically will be crucial, say experts, to offset any decline in tourist numbers or shift away from the lower-end market segment. Enhancing the Maldives’ overall value proposition through improved amenities and eco-friendly measures could help justify the higher costs to travelers.
The Maldives’ heavy reliance on tourism revenue makes getting this balance right an economic imperative. Policymakers will need to carefully monitor the impact of these tax hikes in the months and years ahead.
The bills now move to the full parliament for final approval. Given the unanimous committee vote, they are expected to pass.
