Majlis Economic Committee passes bill raising GST registration threshold to MVR 1.5 million, removes tax on foreign tour operators

The Economic Committee of the People's Majlis has passed a bill amending the Goods and Services Tax (GST) Act, which includes raising the annual income threshold for mandatory GST registration from MVR 1 million to MVR 1.5 million, effective January 1 next year. The amendment aims to promote small and medium-sized businesses and reduce challenges they face. The bill also removes a provision introduced in August which would have levied a 17% tax on foreign tour operators, travel agencies, and online booking platforms that do not have an office in the Maldives but sell resorts and guesthouses in the Maldives. The threshold increase was first announced by Finance Minister Hassan Zareer during the budget presentation for next year, stating that President Mohamed Muizzu had decided on the change to expand the role of small and medium-sized businesses in the economy. Ismail Nizar, Member of North Faadhippolhu Constituency, proposed an additional amendment to the GST bill currently before the committee. The amendment changes the conditions for mandatory registration: entities with a permanent establishment in the Maldives whose total value of goods and services provided exceeds MVR 1.5 million (instead of the previous MVR 1 million) within a twelve-month period must register for GST. A separate provision states that if income currently exceeds MVR 1 million, GST will be payable by the end of this year. Another amendment includes conditions under which currently registered businesses can apply to cancel their GST registration: if the total value of goods and services provided over the past twelve months falls below MVR 750,000, or if it is estimated that the total value to be provided over the next twelve months will fall below MVR 750,000. Member Ashraf Rashid, Member of Faresmathoodoo Constituency, supported the amendments. The committee passed the bill by consensus tonight.