The Maldives government anticipates generating an additional USD 40-80 million (MVR 616 million-1.2 billion) in revenue through the implementation of USD taxation on businesses that earn income in U.S. dollars, according to Economic Minister Mohamed Saeed.

Speaking at a press conference held by the ruling People's National Congress (PNC) on Tuesday, Minister Saeed highlighted the positive impact this policy is expected to have on the country’s foreign exchange earnings.

However, he did not specify whether this revenue would be realized within a year or over a longer period.

The government has decided to levy income tax, pensions, and customs duties in USD for USD-earning businesses.

Additionally, the government plans to increase the green tax and airport development charge while also shifting the Goods and Services Tax (GST) to the destination principle—an approach that could further enhance revenue collection from the tourism sector.

The press conference, which took place at the PNC’s office, focused on the government’s broader efforts to improve revenue through tax reforms.

According to Minister Saeed, these changes are aimed at bolstering foreign exchange reserves and enhancing economic stability.

Highlighting the significant foreign investment presence in the Maldives, Minister Saeed noted that there are currently 950 foreign investments in the country, with 500 of them in the tourism sector. He assured that the government will consult with investors and businesses before implementing any reforms that may affect them. 

The Maldives Association of Travel Agents and Tour Operators (MATATO) has also expressed its support for this decision, along with other fiscal reforms proposed by President Dr. Mohamed Muizzu.

These reforms are expected to provide a significant boost to the economy by enhancing revenue collection in USD, helping the government address its foreign currency challenges and ensure the financial stability of the nation.