With the enactment of a legislative amendment to the Goods and Services Tax Act mandating the collection of Goods and Services Tax from foreign tour operators, entities previously outside the tax system will be integrated to bolster state revenues, the Maldives Inland Revenue Authority said.
The amendment’s purpose is neither to introduce an entirely new tax nor to raise rates for local citizens, authority officials stated, but to broaden the tax base by expanding taxable entities. Appearing on PSM News’s 'Raajje Miadhu' programme, Nafa Waheed, the director general for large taxpayer and international tax audit of MIRA, explained that the legislative adjustment establishes a formal mechanism to register and collect GST from entities currently operating outside the existing fiscal framework.
"Entities that had not previously entered the GST system are now integrated under this amendment, establishing a mechanism to register them and collect GST on the goods and services they are required to tax," Nafa noted. The tax is levied when businesses operating without a permanent taxable establishment in the Maldives supply an inbound tourism product or facilitate a related booking, encompassing tourist accommodation and other tourism goods and services.
The statutory adjustment carries no impact on businesses currently registered with the authority, Nafa stated, noting that local rates and filing procedures remain unchanged. "For those currently registered for GST, no changes have been made to the GST levied on goods and services provided in the Maldives, nor to the GST returns they are required to submit," she elaborated, advising taxpayers to complete administrative procedures through MIRAconnect as previously required.
The legislative amendment mandating GST collection from foreign tour operators was ratified by President Dr Mohamed Muizzu on 31 August. The measure will boost state revenues while remaining tailored exclusively to the tourism sector, President Muizzu maintained following the bill’s ratification.