Maldives Parliament Accepts Bills to Increase TGST, Green Tax, and Departure Fees

The Maldives Parliament has accepted and referred two government-sponsored bills to a standing committee, aimed at increasing the Tourism Goods and Services Tax (TGST), green tax, and departure fees at the airport. The proposed amendments are intended to bolster the country’s fiscal and debt sustainability while increasing foreign exchange revenue.

The bills, which amend the Tourism Act and laws related to departure fees, were debated in the parliament, with 58 out of 68 members voting in favor of their acceptance. At least 10 members voted against the proposals. Both bills were separately voted to be adopted and will now be reviewed by a parliamentary committee before a final decision is made.

Once implemented, the government plans to increase the TGST from the current rate of 16% to 17%, effective from June of next year. The government expects this tax hike to generate MVR 201.9 million in additional revenue in the upcoming fiscal year. Meanwhile, the green tax levied on tourists will rise by 50%. Tour operators managing properties with fewer than 50 rooms will see the green tax increase from $3 to $6 per person, while resorts will charge $12 per tourist instead of the current $6. This change is set to take effect on January 1.

The bills also propose higher airport departure taxes and development fees, which are charged in US dollars. This hike is part of a broader government strategy to revitalize the economy through a series of fiscal measures, including a review of airport tax and fee rates, expanding the GST tax base, and raising excise duties on unhealthy products.

The Maldivian government has stressed the importance of these measures in addressing economic challenges. By revising tax structures and introducing new revenue streams, the administration aims to secure the country's financial stability in the face of rising public debt and economic uncertainties.

The green tax, introduced in 2016, has been an essential revenue source for the Maldives, which relies heavily on tourism. The new changes reflect the government’s broader efforts to improve the nation's financial health while maintaining the high standards of its tourism sector.