With effect from 1st July 2025, the Maldives’ Tourism Goods and Services Tax (TGST) rate will increase from 16% to 17%. The Maldives Inland Revenue Authority (MIRA) has approved this modification, which is a component of the 7th amendment to the Goods and Services Tax Act. Its goal is to help the Maldives’ thriving tourism industry, which is a vital component of the country’s economy, continue to expand and thrive.
All transactions where the “time of supply” takes place on or after 1st July 2025, will be subject to the new 17% TGST rate. Either the date an invoice is sent out or the date payment is received determines the “time of supply.” For companies managing reservations and payments made prior to the rate change, this guarantees uniformity and clarity.
Resorts, guesthouses, restaurants, spas, and dive schools are among the tourism-related enterprises that will have to implement the new TGST rate as of 1st July 2025. While some businesses can start using the new rate from their first operational hour on the same day, businesses that are open around-the-clock should start using it at midnight on the effective date. Businesses are advised to update their point-of-sale (POS) platforms, reservation systems, and billing procedures by 1st July 2025, to guarantee a smooth transition. This will maintain a seamless consumer experience by ensuring that tourism-related goods and services reflect the new TGST rate.
To assist businesses in understanding how the “time of supply” principle would be applied during the rate adjustment, MIRA has supplied the following examples:
- Even if a guest stays after the rate rise, the 16% TGST rate will be applied if they book and pay for their stay before 1st July 2025
- Regardless of when the service is rendered, the 17% rate will be applied if payment or invoicing takes place on or after 1st July 2025
To guarantee seamless compliance with the new Maldives tourism tax TGST rate, tourism operators are urged to make preparations in advance. Making changes early on can help prevent any interruptions and guarantee that companies keep providing guests with outstanding experiences. This change presents a chance to strengthen the Maldives’ tourist industry and solidify the nation’s standing as a top travel destination worldwide. It is anticipated that the switch to the new TGST rate will be beneficial for the Maldives’ tourism industry’s long-term viability and expansion.
The Maldives’ continued dedication to bolstering its tourism infrastructure is reflected in the TGST rate hike. The nation is guaranteeing its competitiveness and attraction as a top travel destination for people from around the world by upholding a clear and uniform tax system. The Maldives continues to be a top option for travelers looking for an exceptional and one-of-a-kind vacation because of its breathtaking natural beauty, first-rate hospitality, and emphasis on sustainability. The Maldives’ position as a market leader in tourism will be further cemented if these measures are implemented successfully.
