The Maldives has introduced changes that will raise key taxes and fees related to tourism. On Tuesday, November 5, 2024, President Mohamed Muizzu formally approved amendments to three significant laws, which will lead to higher airport departure fees, an increase in the Tourism Goods and Services Tax (TGST), and a doubling of the green tax. The revised laws include the Tourism Act, the Value Added Tax Act, and the Taxes and Fees on Passengers Departing from Maldivian Airports Act.
The Tourism Goods and Services Tax (TGST) on tourism services will rise from 16% to 17%, effective July 2025. The increase in the Tourism Goods and Services Tax (TGST) is projected to generate an additional MVR 202 million in revenue for the government. This additional revenue, resulting from the rise in the tax rate from 16% to 17%, will be crucial in supporting the Maldives’ economy, which heavily depends on tourism.
Effective January 2025, tourism providers in the Maldives’ accommodation sector will experience a significant fee increase. Providers who previously paid $6 per person per night will now pay $12, while those who paid $3 will face a doubled fee of $6. This 100% rise is part of the government’s strategy to boost revenue from tourism. Additionally, the revised green tax is projected to generate MVR 964 million, supporting environmental sustainability efforts.
With the revised airport development fee and departure tax, the tax for economy class passengers will stay the same, while it will rise from $30 to $50 for higher classes. Business class fares will increase by $120, and first-class fares will see a $240 increase. These changes are expected to generate an additional MVR 1.5 billion from airport fees.
With the recent adjustments to taxes and fees, the government is set to see a MVR 2.7 billion boost in revenue, with tourism directly contributing 40% to this growth, according to the Finance Ministry.
Feature Photo by Dynamyst
