Tax Updates – Maldives 23/11/2022
The parliament of the Maldives have passed the government proposed bill to increase the country’s tourism Goods and Service Tax from the current 12% to 16% effective 01st January 2023 and applies to goods sold and services supplied by tourist resorts, tourist hotels, guesthouses, picnic islands, tourist vessels and yacht marinas authorized by the Tourism Ministry and will be taxed on the total value of the transaction.
Along with Tourism Goods and Service Tax the GST will also increase from 6% to 8%.
Maldives President Ibrahim Mohamed Solih ratified the amendment bill to increase the tax rates. Travel firms quoting holiday package prices will need to revise prices effective from 1 January.
Quoting the reason for the increase, Minister of Finance Ibrahim Ameer said the country’s inflation rate would remain low compared to other countries despite the tax hikes. He estimated the tax increase would be just one of many factors raising inflation from around 3% this year to 5.4% in 2023, noting it was still well below the inflation rate in the EU and the UK.
The government expects to generate USD63 million from GST and USD136 million from TGST by next year, with a total expected revenue of USD195 million.