Maldives tourism operators warn of impact from new TGST regulations

The Maldives government is facing backlash from international tour operators following the decision to implement a 17 per cent Tourism Goods and Services Tax (TGST) on profit margins, effective 1 October. Under the new destination principle, foreign agents without a physical presence in the Maldives must register with the Maldives Inland Revenue Authority (MIRA) and pay tax on their markup.

Foreign operators argue the tax is an aggressive overreach that targets business activities occurring entirely outside Maldivian territory. Major concerns include the risk of double taxation, as agents already pay taxes on profits in their home countries, and the potential for increased costs that may be difficult to pass on to consumers due to existing protection laws.

The Maldives Association of Travel Agents and Tour Operators (MATATO) has launched a survey to assess the commercial and operational impacts of these regulations. The study aims to evaluate effects on pricing, profit margins, and the overall competitiveness of the Maldives as a destination, with the goal of providing evidence-based recommendations to the government.