Tourism Minister Says Government Will Remove TGST Destination Principle for Foreign Tour Operators

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The government has decided to remove the destination principle it introduced for the Tourism Goods and Services Tax (TGST), the rule that makes foreign tour operators pay the tax, Tourism and Civil Aviation Minister Mohamed Ameen has said. He spoke at a press conference at World Travel Market (WTM) in London, according to a report published on 4 November by the state broadcaster PSM News.

The Maldives Inland Revenue Authority (MIRA) has collected the tax from overseas sellers since 1 October. Nothing in the law changes until Parliament passes the repeal, the President ratifies it and it is published in the Government Gazette.

The Tourism Ministry had not published its own account of the remarks on its website or X account at the time of writing.

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According to PSM, Ameen said the government had first decided to charge 17% TGST on tour operators on the advice of international financial institutions, and that more than 100 major tour operators had since registered with MIRA. After concerns from the tourism industry, he said, the government decided to restore the earlier arrangement, under which foreign tour operators did not pay TGST.

He said the decision followed consultations between the Tourism Ministry, the Ministry of Finance and Public Enterprises, the Attorney General's Office, the Commissioner General of Taxation, MIRA and industry representatives. The amendment is with the relevant parliamentary committee, he said, and he expects Parliament to pass it within one to two weeks.

Ameen added that MIRA would keep the power to set fair prices if resort operators declared prices for TGST purposes that were lower than actual market rates. PSM reported him as saying some operators were not providing services at fair market prices.

The bill, numbered 20/2026/B-31, was submitted by Kolamaafushi MP Ibrahim Didi on behalf of the government and read for the first time on 20 October. Parliament accepted it on 26 October by 43 votes to none, with 29 members not voting, as Maldives Today reported. Its fiscal note, citing MIRA, puts the revenue that would be lost at MVR 1.61 billion: MVR 1.31 billion from foreign tour operators and MVR 299.3 million from overseas travel agents.

Under the bill, GST collected on these sales since 1 October would be returned once the amendment takes effect. Updated GST regulations would have to follow within 90 days.

Parliament's Economic Committee, which is reviewing the bill, has opened it to public comment together with an Income Tax Act amendment bill. Comments can be sent until 12:00 on Monday, 9 November, according to a Gazette notice published on 4 November.

Step Back

The destination principle was added to the Goods and Services Tax Act (Law 10/2011) by its eighth amendment, which Parliament passed on 23 August. President Mohamed Muizzu ratified it on 31 August, according to the President's Office. The office said the change created a legal framework for collecting GST from offshore booking platforms, foreign tour operators and travel agents. It covers accommodation, meals, transport and other tourism services sold by businesses with no permanent establishment in the Maldives, at the existing 17% TGST rate.

MIRA announced the same day that the tax would apply from 1 October, and on 1 October said it applied "from today".

Travel industry groups objected. On 4 October the Maldives Association of Travel Agents and Tour Operators said Ameen had confirmed the President's decision to change the framework, as Maldives Today reported on 6 October.

TGST brought in MVR 9.32 billion between 1 January and 29 October, according to the Finance Ministry's weekly fiscal report. The 2026 budget forecasts MVR 11.47 billion for the full year. The report does not show how much of the total came from overseas sellers.