The Maldives has introduced a new tax on foreign sellers of inbound travel to the island nation, effective Thursday, October 1. The tax extends the country's Goods and Services Tax (GST) to foreign businesses selling inbound tourism products or providing booking or agency services.
The 17% tax applies to the margin overseas travel firms make selling the Maldives. It covers accommodation, meals, transport, and other tourist activities, and affects agents, tour operators, OTAs, DMCs, wholesalers, and other businesses or platforms selling Maldivian travel products.
The UK travel sector, including Abta and major consortia, had lobbied for a grace period to process the changes. Abta said the tax was introduced without consultation and wrote to the Maldives President requesting a postponement of at least six months. The Advantage Travel Partnership noted a potential significant impact, and The Travel Network Group expressed concern about commercial viability for infrequent sellers.
The Maldivian Inland Revenue Authority stated that GST will apply to inbound tourism products supplied by overseas suppliers from Thursday, encouraging compliance. Abta's Director of Industry Relations expressed disappointment at the lack of a full response to their concerns, while continuing to work with international trade associations.
For travellers, this tax may lead to higher prices for Maldivian holidays as foreign sellers adjust to the new cost, potentially affecting package deals and booking fees.
