Bill to Abolish New Tax on Foreign Tour Operators Submitted to Parliament

A bill has been submitted to the People’s Majlis seeking to abolish the Goods and Services Tax (GST) that was imposed on foreign tour operators and inbound tourism products from the beginning of this month. The amendment to the Tax on Goods and Services Act was tabled by Ibrahim Didi, the MP for Kolamaafushi constituency. The first reading of the bill was held during today’s parliamentary session. The tax had been introduced on inbound tourism products provided by entities without a permanent establishment in the Maldives, including through online booking platforms and foreign tour operators. The bill aims to reverse this measure and also strengthen the powers of the Maldives Inland Revenue Authority (MIRA) to counter tax avoidance. The legislation specifies criteria for determining when a transaction is considered to have a tax benefit purpose, allowing the Commissioner General to disregard such transactions. According to the bill, the abolition would take effect upon passage, ratification and gazetting. The government had previously estimated that the tax on foreign tour operators and offshore booking platforms would generate 1.6085 billion rufiyaa annually.