Majlis greenlights increase of TGST to 17 percent
Eight lawmakers representing the main opposition MDP, voted against the bills
Tourists at a local island, as part of the "Savaadheetha dhathuru"
The People’s Majlis has passed the bill to increase the tax collected from the tourism sector to 17 percent.
A proposal was submitted to amend the Maldives Tourism Act to remove the requirement of obtaining permission from the President's Office before leasing land, islands, and lagoons for resort development, in mid-October. MP for South Mahchangoalhi constituency Musthafa Hussain submitted the proposal on behalf of the government.
Three bills submitted by the government to increase TGST, Green Tax, and Airport fees and taxes were passed during Thursday’s parliamentary sitting, without any amendments.
The amendments to increase taxes and fees were passed unanimously by government members.
Eight lawmakers representing the main opposition Maldivian Democratic Party (MDP), voted against the bills.
The amendment to the Goods and Services Tax Act was proposed to increase the TGST collected from the tourism sector. While TGST is currently collected at 16 percent, the bill initially included increasing it to 17 percent starting from June 2025.
However, with the committee's changes, the parliament passed to maintain 16 percent TGST until the end of June next year and increase it to 17 percent starting from July.
In addition to this, the amendment to the Tourism Act to increase Green Tax was passed.
With this, establishments currently paying USD six as Green Tax will have to pay USD 12 per tourist, from July 2025. Those currently paying USD three will have to pay USD six.
Introducing the bill, the lawmaker stated that the government is proposing the bill to make some changes to the regulations regarding leasing islands, land, and lagoons for tourism as stated in the Maldives Tourism Act, and to increase the amount of Green Tax collected under the law.
The amendment detailed the Green Tax to be collected from tourists staying at resorts, guesthouses, and safari vessels in the Maldives.
It proposed to collect USD six per person per day between 1 January 2023, to 31 December 2024, and USD 12 per person per day from 1 January 2025, onwards.
This is the amendment proposed to section (g).
In addition to this, for hotels and guesthouses in inhabited islands with fewer than 50 rooms, it proposes collecting USD three per tourist per day between 1 January 2023 to 31 December 2024, and USD six per person per day from 1 January 2025 onwards.
This is the amendment proposed to section (h).
With the passing of the amendment to the law on collecting taxes and fees from passengers departing from Maldivian airports to foreign countries, foreign tourists traveling in economy class will be charged USD 50, both Maldivians and foreigners traveling in business class will be charged USD 120, those traveling in first class will be charged USD 240, and those traveling by private jet will be charged USD 480.
It is estimated that the state will receive an additional MVR 200 million with these amendments passed by parliament.
