News Desk
The government moved to plug a major tax loophole today, introducing a bill to Majlis that forces overseas travel agents and booking platforms to pay Goods and Services Tax (GST) on Maldivian holiday sales.
Submitted on behalf of the government by Kulhudhuffushi North MP Mohamed Dawood, the amendment to the Goods and Services Tax Act aims to enforce the “destination principle.” That means any foreign tour operator, overseas travel agent, or online booking giant selling accommodation and services in the Maldives will have to slice off GST for the state coffers.
If passed, the Finance Ministry estimates the tax tweak will net the state roughly MVR 1.6 billion every year. The bulk of that—around MVR 1.3 billion—is expected directly from foreign tour operators, while overseas travel agents will bring in another MVR 299.3 million.
Because these offshore platforms don’t operate physically inside the country, the bill instructs the Maldives Inland Revenue Authority (MIRA) to set up simplified, hassle-free registration and payment portals specifically for foreign vendors.
Getting the system up and running won’t be completely free. MIRA expects a one-off setup cost of MVR 2.8 million, plus about MVR 5.1 million a year in recurring staff costs to handle the extra administrative load. But officials say the massive bump in annual tax revenue far outweighs the setup bill.
If Majlis passes the legislation, the new offshore GST rules are set to kick in on October 1.
