Introduction

The Maldivian government has recently introduced new amendments to several key pieces of financial legislation, namely the Goods and Services Tax Act (10/2011), the Airport Taxes and Fees Act (29/2016), and the Tourism Act (2/99). These legislative changes aim to systematically increase tax rates to strengthen national revenue streams, impacting both the general economy and the core tourism sectors.

The statutory updates were officially published in the Government Gazette on 5th November 2024. Below is a comprehensive breakdown of the core adjustments and implementation deadlines.

Core Legislative Adjustments

1. Tourism Goods and Services Tax (TGST)

• Rate Increase: The TGST rate will increase from 16% to 17%, effective from 1st July 2025.
• Scope Exclusions: Staff-only cafés operating exclusively for employees within tourist establishments have been removed from the scope of TGST. Previously, this exception applied only to staff-only shops.
• Note: Both employee shops and employee cafés remain within the scope of the General Goods and Services Tax (GGST).

2. Green Tax

Effective from 1st January 2025, Green Tax rates payable per tourist per night (excluding infants under 2 years of age) are adjusted as follows:

• Resorts, Tourist Vessels, & Large Hotels/Guesthouses (More than 50 rooms): USD 12 per tourist per night (an increase of USD 6).
• Small Hotels/Guesthouses (50 or fewer rooms): USD 6 per tourist per night (an increase of USD 3).

3. Departure Tax & Airport Development Tax

The revised tariff frameworks for both Departure Tax and Airport Development Tax apply identically across travel tiers, taking effect from 1st December 2024:

• Maldivians (Economy Class): USD 12 (No change)
• Foreigners (Economy Class): USD 50 (USD 20 increase)
• Business Class (All passengers): USD 120 (USD 60 increase)
• First Class (All passengers): USD 240 (USD 150 increase)
• Private Jet (All passengers): USD 480 (USD 360 increase)

Summary Comparison Table