Bill seeks to scrap GST requirement for overseas tour operators

Kolamaafushi MP Ibrahim Didi has submitted a bill to the Parliament seeking to repeal provisions requiring foreign booking platforms, travel agents and tour operators to pay Goods and Services Tax (GST) on services provided to the Maldives.

The bill seeks to remove the relevant provisions introduced through the recent amendments to the GST Act, reversing the requirement to collect taxes from tourism service providers based outside the Maldives.

The move follows President Dr Mohamed Muizzu’s decision to reverse the policy after concerns were raised by tourism industry stakeholders and travel agents just three days after tax collection began.

The proposed amendment is intended to give effect to the President’s decision.

President Muizzu ratified the eighth amendment to the GST Act on August 31.

The amendment introduced the destination principle into the country’s tax framework, with GST collection from foreign booking platforms and tour operators commencing on the first of this month.

Concerns over the tax had been raised even before its implementation, particularly by major tour operators in key source markets, including Russia and India.

European travel industry associations, including France’s EDV and SETO and Italy’s ASTOI Confindustria Viaggi, raised concerns about the financial and administrative impact of the Maldives’ new GST requirements for overseas tourism businesses.

They highlighted difficulties arising from bookings already sold at agreed prices and urged the authorities to reconsider the implementation arrangements.

EDV and SETO requested that existing bookings remain under the previous tax framework and proposed postponing implementation until an agreed date in 2027