Britain’s largest travel association, ABTA Limited, asked the Maldives to suspend a new tax on foreign sellers of Maldives holidays four days before the President ratified it, leaving UK tour operators to prepare for an offshore registration regime that takes effect on October 1, 2026.<\/p>\n
ABTA – The Travel Association wrote to Ministry of Tourism and Aviation Mohamed Ameen on August 27, urging the government to pause implementation and consult operators in the UK and other source markets. President Mohamed Muizzu ratified the 8th amendment to the Goods and Services Tax (GST) Act on August 31, and the law was published in the Government Gazette the same day.<\/p>\n
The amendment applies the destination principle to Maldivian GST. Foreign tour operators, overseas travel agencies and offshore booking platforms that sell or arrange accommodation, food, transport and other tourism services delivered in the Maldives must register with the Maldives Inland Revenue Authority (MIRA) and account for Tourism GST at 17%, even without a permanent place of business in the country.<\/p>\n
Tax is charged on the operator’s margin or commission rather than the full package price, with no input tax deduction under the special regime. A revision to Section 15 of the GST Act brings agency and booking services within the tourism sector, requiring registration regardless of turnover.<\/p>\n
ABTA said in the letter that it respected the right of destination governments to set tax policy but that the proposal had not been put to the businesses it affects. The association asked for clarification on which businesses must register, how GST is calculated and accounted for, and whether liability turns on the date of booking or the date of travel.<\/p>\n
“Introducing new obligations without engagement,” the letter said, risks unintended consequences including barriers to trade.<\/p>\n
The letter was signed by Susan Deer, ABTA’s Director of Industry Relations. ABTA represents about 3,500 consumer brands with combined annual turnover of more than \u00a341 billion.<\/p>\n
The European Travel Agents’ and Tour Operators’ Associations, based in Brussels, made a parallel approach to Maldives Ambassador to Belgium and the European Union Dhiyana Saeed. Both bodies said compliance costs could prompt some operators to cut back Maldives sales or move volume to competing destinations.<\/p>\n
Operators contract Maldives inventory up to a year ahead. Rate sheets and brochure prices for the 2026\/27 winter season were agreed months before the bill appeared, and European package travel rules restrict operators from surcharging customers after a sale in these circumstances, leaving the cost to fall on margins.<\/p>\n
The government submitted the bill to the People’s Majlis on August 15 through Kulhudhuffushi North MP Mohamed Dhawood. Its costing projects additional annual revenue of MVR 1.6085 billion, about USD 104 million, against MVR 2.8 million in setup costs and MVR 5.1 million a year in administration.<\/p>\n
The Ministry of Finance and Public Enterprises has said that of roughly USD 5.6 billion in annual tourism receipts, about USD 3.2 billion is recorded entering the domestic banking system, and has identified offshore selling as a principle cause of shortfall.<\/p>\n
New Zealand consulted for close to three years before extending GST to offshore sellers in 2016. Australia phased in its equivalent across two budgets.<\/p>\n
Consequential amendments to the GST Regulation are due within 30 days. MIRA has yet to public guidance on registration, reporting and payment procedures for non-resident suppliers.<\/p>\n
The Ministry of Tourism and Aviation had not publicly responded to the ABTA letter at the time of writing.<\/p>\n
Tourism is the largest contributor to Maldivian government revenue and foreign currency earnings. The United Kingdom is among the country’s leading source markets.<\/p>\n","protected":false},"excerpt":{"rendered":"
Britain’s largest travel association, ABTA Limited, asked the Maldives to suspend a new tax on foreign sellers of Maldives holidays four days before the President ratified it, leaving UK tour operators to prepare for an offshore registration regime that takes effect on October 1, 2026. ABTA – The Travel Association wrote to Ministry of Tourism<\/p>\n","protected":false},"author":4,"featured_media":17279,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2424,2981,2508,2994,2507,2429],"tags":[3595,1481,3529,1496,2063,2201,2220],"class_list":["post-17649","post","type-post","status-publish","format-standard","has-post-thumbnail","category-finance","category-government","category-latest-news","category-national-news","category-top-stories-featured-area","category-tourism","tag-abta-the-travel-association","tag-ministry-of-finance","tag-ministry-of-finance-and-public-enterprises","tag-ministry-of-tourism","tag-tgst","tag-uk","tag-united-kingdom"],"yoast_head":"\n