Government Submits Bill to Reverse GST Expansion on Offshore Tour Operators

The government has introduced a bill in the People’s Majlis to repeal the recent extension of the Goods and Services Tax (GST) to foreign travel platforms, overseas tour operators, and non-resident travel agencies. 

The legislation was formally presented on behalf of the administration by Kolamaafushi MP Ibrahim Didi.

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The primary objective of the proposed amendment is to roll back the Eighth Amendment to the GST Act, passed by the People’s Majlis on 23 August 2026 and ratified by President Muizzu on 31 August.

Under those provisions, non-resident businesses without a permanent establishment in the Maldives were required to register with the Maldives Inland Revenue Authority (MIRA) and pay a 17 per cent Tourism GST (TGST) on inbound tourism products, booking services, and agency fees.

According to the financial impact statement submitted alongside the bill, halting the enforcement of the offshore GST framework will result in an estimated MVR 1,608.5 million in foregone state revenue.

The government’s decision to reverse the tax reform follows intense pushback from international travel associations, foreign tour operators, and domestic tourism bodies. 

In Italy, which represented the Maldives’ fifth-largest source market with 98,039 tourist arrivals through September of this year, tour operator Kia Ora Viaggi suspended new Maldives sales from 1 October, reallocating group flights and resort allotments to competing destinations such as Seychelles, Mauritius, Fiji, and French Polynesia. 

Shortly thereafter, Italian trade association ASTOI Confindustria Viaggi announced that nearly all its member operators had refused to register for GST in protest, demanding an immediate repeal or overhaul of the rules.

The dispute quickly expanded across Europe as the European umbrella association ECTAA and British travel association ABTA called for an immediate enforcement freeze. 

ABTA escalated its concerns directly to President Dr Mohamed Muizzu, citing severe administrative complexities, contract disruptions, and a lack of prior consultation with foreign travel suppliers. 

Domestically, the Maldives Association of Travel Agents and Tour Operators (MATATO) voiced strong concern over the practical feasibility of local businesses monitoring compliance across thousands of overseas partners. 

Minister of tourism and civil aviation Mohamed Ameen announced the planned changes during an event marking World Tourism Day, saying President Dr Mohamed Muizzu had decided to review the provisions following requests from local tourism stakeholders and international travel industry representatives.

“A significant number of requests were submitted to President [Mohamed Muizzu] by industry leaders and travel agents regarding this matter,” Minister Ameen said. “The President has now decided to make amendments to the TGST Act regarding the destination principle very soon.”