Maldives tourism industry protests new tax and forex rules

tourism tax Goods and Services Tax travel operators foreign exchange law Maldives

The Maldives tourism industry is facing significant disruption due to new government regulations regarding taxation and foreign exchange. An amendment to the Goods and Services Tax (GST) Act will extend a 17 percent tax to offshore booking platforms, foreign tour operators, and travel agents effective October 1, 2026.

Industry groups, including Destination Future and the Maldives Association of Tourism Industry (MATI), have expressed concerns over the short transition period following the law's ratification on August 31. Critics argue the one-month window is insufficient for businesses to adjust booking systems and price calculations for the upcoming winter season. There are also warnings that these costs may impact international holiday distribution.

Additionally, a new foreign exchange law requires resorts to convert 40 percent of their US dollar revenue through local banks. MATI Chairman Hussain Afeef has called for government discussions to address the potential impact on resort operations, noting that a large portion of revenue is required for operational costs and imports.