Majlis passes resolution to end practice of collecting taxes exclusively from businesses registered in the Maldives
23 އޯގަސްޓު 2026 | އާދީއްތަ 11:16The Parliament has passed an amendment to the Goods and Services Tax Act, enabling the taxation of foreign tour operators and online booking platforms providing services in the Maldives. By implementing the "destination principle," this legislative change ensures that the state can generate revenue from inbound tourism services offered by unregistered foreign entities.
Mohamed Dawood, Member of Parliament for the North Kulhudhuffushi constituency. | People's Majlis
The People's Majlis has passed the amendment bill to reform the taxation framework, transitioning from a system where Goods and Services Tax (GST) was exclusively levied on businesses registered in the Maldives to a broader application covering all goods and services provided within the country.
The bill, introduced by PNC Member for North Kulhudhuffushi, Mohamed Dawood, was reviewed by the Committee of the Whole House. The committee approved the bill as submitted, without any further amendments.
Prior to the vote during Sunday's parliamentary sitting, Ibrahim Naseem, the People's National Congress (PNC) member for the Thulusdhoo constituency, submitted three amendments to the bill.
Specifically, the member proposed an amendment to insert a new subsection under point 15 of Section 9 of the bill. Furthermore, the member proposed the addition of a new clause following Section 3 to further clarify the definition of "services" as stipulated in that section. The proposed detail specifies that "services" shall encompass all matters not classified as goods; however, notwithstanding this provision, "services" shall not include money.
The third proposed amendment seeks to insert a new clause following Section 26, which pertains to information regarding inbound tourism service providers. Under this provision, the Maldives Inland Revenue Authority (MIRA) may be authorized to require service providers to submit any information in their possession necessary to verify whether entities required to register under this Act have complied with their registration obligations.
On Sunday, Parliament passed the bill incorporating all three amendments. The legislation was approved with a majority of 54 members in favor, while two members voted against it.
The bill proposes to amend existing legal provisions that limit the collection of GST to goods sold within the Maldives, seeking instead to rephrase the law to ensure GST is levied on all goods and services provided within the country. Furthermore, it proposes to revise the clause which currently stipulates that GST is applicable only to goods or items sold by businesses operating locally. This change aims to remove the current limitation that applies the tax exclusively to Maldivian-registered businesses.
The primary objective of this bill is to establish a legal framework for collecting GST on services provided by offshore booking platforms, foreign tour operators, and travel agents. The bill also outlines that a key purpose of this amendment is to implement the "destination principle" in the Maldives, a standard practice in global taxation. This principle ensures that services are taxed in the country where they are consumed or utilized.
The bill outlines amendments to the law aimed at taxing foreign tourism businesses, specifically defining the goods and services provided within the Maldives. Furthermore, the legislation specifies the types of business activities that will be subject to taxation.
Furthermore, the regulations have been updated to include inbound tourism products provided by entities without a permanent place of business in the Maldives under the scope of tourism sector goods and services. Additionally, a detailed definition of "charter" has been established, specifically targeting charter trips sold by safari vessels.
