The Parliamentary Economic Affairs Committee unanimously passed key amendments to the Goods and Services Tax Act, raising the mandatory registration threshold from MVR 1 million to MVR 1.5 million in annual taxable turnover.
The revisions align statutory tax legislation with the administration’s upcoming state budget proposals, aiming to reduce compliance burdens on micro, small, and medium-sized enterprises.
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The proposal follows an announcement by Minister of Finance Hassan Zareer during his presentation of the upcoming state budget, in which he stated that President Dr Mohamed Muizzu decided to raise the annual GST threshold to MVR 1.5 million starting January 1 to foster small-business growth and enhance local economic participation.
During last night’s committee review of the pending GST bill, Feydhoo Uthuru MP Ismail Nizar formally introduced the threshold amendments, which were seconded by Faresmaathodaa MP Ashraf Rasheed.
Under the committee-approved provisions, businesses operating a permanent establishment in the Maldives will only be legally required to register for GST if their taxable supplies exceed MVR 1.5 million over a 12-month period or a shorter statutory timeframe, lifting the longstanding MVR 1 million mark.
The existing MVR 1 million threshold remains legally binding through December 31, with the new MVR 1.5 million baseline taking effect on January 1. Furthermore, registered businesses will be permitted to apply for deregistration if their total turnover falls below MVR 750,000 over the preceding 12 months, or if projected supplies for the subsequent 12 months are estimated not to exceed that same MVR 750,000 amount.
Presenting the amendments, MP Nizar noted that easing the threshold directly addresses operational obstacles facing micro-enterprises and small traders across island communities.
The parent GST bill was originally referred to the Economic Affairs Committee to undo a controversial tax amendment passed in August that had mandated a 17 percent tax on offshore online travel agencies, foreign travel intermediaries, and tour operators that market Maldivian resorts and guesthouses without maintaining a local physical office.
Following pushback from tourism stakeholders over global distribution friction and double-taxation concerns, the government moved to repeal the clause through the current legislative vehicle.
With the committee’s unanimous endorsement, the consolidated bill, incorporating both the repeal of the 17 percent booking tax and the new MVR 1.5 million SME threshold, now heads to the People’s Majlis floor for final debate and enactment.
