Maldives Revokes 17% Tourism GST for Foreign Agents and Operators

The Maldivian government has officially tabled an Amendment Bill to the Goods and Services Act to revoke a 17% tourism tax that was imposed on foreign agents and tour operators starting October 1, 2026. This tax, which required overseas entities to register with the Maldives Inland Revenue Authority (MIRA) and pay tax on margins from tourism products, faced significant backlash from the travel industry. The decision to scrap the levy follows weeks of intense lobbying by industry bodies, including ABTA, which argued that the tax created an administrative and financial burden that threatened the competitiveness of the Maldivian tourism sector.

By removing this tax, the government aims to streamline operations for international partners and ensure that the Maldives remains an attractive destination for global travel agencies. The move is a direct response to concerns that the tax would lead to increased costs for consumers and reduced bookings for local resorts and service providers. The legislative process is now underway to formally repeal the requirement, marking a significant policy reversal intended to support the country's vital tourism economy.

International travel agents, tour operators, and wholesale travel companies that sell Maldivian tourism products are directly impacted by this legislative change. Additionally, travellers who book their holidays through these international intermediaries will benefit from the removal of this tax-related cost pressure.

Makutet expects this reversal to stabilize the pricing landscape for Maldivian luxury travel, which had become increasingly volatile since the tax's introduction. We anticipate that the government will now focus on alternative revenue-generating measures that do not directly penalize the international distribution chain, as the economic cost of the tax was clearly outweighing the projected fiscal gains.