President Ratifies GST Law to Collect $104 Million from Foreign Tour Operators

President Dr Mohamed Muizzu has ratified amendments to the Goods and Services Tax (GST) Act, mandating the collection of tax from foreign tour operators and offshore booking platforms. The legislation, signed during a ceremony at the President’s Office on Tuesday, aims to modernize the Maldives' tax framework by implementing the "destination principle." Under the new rules, the government will now collect GST on the value of goods and services supplied to travel agents and booking platforms operating outside the country. The amendments ensure that any services provided from a business operating within the Maldives, or those tied to immovable property in the country, are treated as domestic supplies subject to tax. Critically, the law now makes GST mandatory for all inbound tourism products—including accommodation, food, and transportation—even if the business providing these services has no permanent physical presence or office in the Maldives. This closes a previous loophole that allowed offshore entities to bypass local tax obligations while profiting from the Maldivian tourism sector. This legislative shift is designed to address long-standing implementation difficulties in the GST system and create a more equitable playing field for local operators. By capturing revenue from the global digital platforms and agencies that facilitate tourism, the government seeks to strengthen the state's fiscal resilience. The economic impact of these changes is substantial. According to government revenue estimates, the ability to collect taxes from offshore booking platforms and foreign tour operators is expected to increase state revenue by approximately USD 103.8 million annually. This windfall is anticipated to provide the government with significant additional funds to invest in national development and public services.