Tax Rates Increased Following Ratification of New Amendments
The rates for the Tourism Goods and Services Tax (“TGST”), Green Tax (“GRT”), and Airport Taxes and Fees have been increased, following the ratification of several key amendments today, 5 November 2024. These include:
- Seventh Amendment to the Goods and Services Tax Act1
- Fourteenth Amendment to the Tourism Act2
- Second Amendment to the Airport Taxes and Fees Act3
This is part of the government’s fiscal strategy aimed at reducing budget deficits and boosting foreign currency inflows. These changes are expected to impact both businesses and travellers across the tourism industry.
The new rates are set to be implemented with varying effective dates for each tax type. Further details on the changes introduced via the amendments, including the effective dates and changes to the tax rates for each tax type is outlined below.
Tourism Sector Goods and Services Tax
Starting from 1 July 2025, the TGST rate will increase from 16% to 17%. A transitional period of 7 months is provided giving some time for businesses operating in the tourism sector to prepare for the rate change and address any potential impacts.
| Current Rate (1 January 2023 – 30 June 2025) |
New Rate (Effective from 1 July 2025) |
| 16% | 17% |
In addition to the above, the amendment now allows not only staff shops but also staff cafes that cater exclusively to employees in tourist establishments to register for general sector GST instead of TGST. Previously, this exemption applied only to staff shops, while all other facilities and places in tourist establishments were required to register for TGST.
Green Tax
The Fourteenth Amendment to the Tourism Act introduces changes to the GRT rates, effective 1 January 2025. The updated rates are as follows:
| GRT new rates effective from 1 January 2025 | ||
| Tourist resorts, integrated tourist resorts, resort hotels, tourist vessels and; Hotels and guesthouses located in uninhabited islands | USD 12 from each tourist per day of stay | |
| Hotels and guesthouses located in inhabited islands | With more than 50 rooms | With 50 rooms or less |
| USD 12 from each tourist stay per day of stay | USD 6 from each tourist stay per day of stay | |
Additionally, effective from 1 January 2025 an exemption has also been introduced for toddlers under the age of 2, who will no longer be subject to GRT.
Airport Taxes and Fees
Departure Tax
Departure Tax is levied on passengers4 departing the Maldives based on travel class. Following changes are brought to departure tax rates, which is set to come in effect from 1 December 2024 onwards.
| Class | Maldivian passengers | Foreign passengers | ||
| Until 30 Nov 2024 |
New rates effective from 1 Dec 2024 |
Until 30 Nov 2024 |
New rates effective from 1 Dec 2024 |
|
| Economy | USD 12 | USD 12 | USD 30 | USD 50 |
| Business | USD 60 | USD 120 | USD 60 | USD 120 |
| First | USD 90 | USD 240 | USD 90 | USD 240 |
| Private jet | USD 120 | USD 480 | USD 120 | USD 480 |
Airport Development Fee (“ADF”)
ADF is collected from passengers departing from Maldives from Velana International Airport. Following changes are brought to ADF rates which are also set to come in effect from 1 December 2024 onwards.
| Class | Maldivian passengers | Foreign passengers | ||
| Until 30 Nov 2024 |
New rates effective from 1 Dec 2024 |
Until 30 Nov 2024 |
New rates effective from 1 Dec 2024 |
|
| Economy | USD 12 | USD 12 | USD 30 | USD 50 |
| Business | USD 60 | USD 120 | USD 60 | USD 120 |
| First | USD 90 | USD 240 | USD 90 | USD 240 |
| Private jet | USD 120 | USD 480 | USD 120 | USD 480 |
It is notable that ADF and Departure Tax rates for Maldivian passengers traveling in economy class will remain unchanged.
Additionally, the amendment introduces provisions for reclaiming any excess or incorrectly collected airport taxes and fees paid to the Maldives Inland Revenue Authority (MIRA) where these amounts are later refunded to the passenger.
Accompanying Regulations
The necessary amendments to the respective regulations accompanying the acts are to be gazetted within 30 days of the effective date of the amendments.
Effective Date
The effective date of the above outlined amendments are 5 November 2024.
