The government has decided to shift the Goods and Services Tax (GST) system to the destination principle from next year in order to charge GST for goods and services purchased from international businesses.
According to the Medium-Term Revenue Strategy formulated by the Finance Ministry, the government intends to fully implement the destination principle by amending the GST Act.
With the switch to destination principle, eight percent GST will be charged for goods and services popular among Maldivians such as Shein, Amazon, Netflix and Spotify.
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Additionally, tourists visiting the Maldives will be required to pay the 16 percent Tourism Goods and Service Tax (TGST) from sites such as Bookin.com, Agoda and Airbnb.
According to the finance ministry, the full implementation of the destination principle will broaden the tax base. With that, the state’s revenue will improve, according to the ministry’s forecasts. They are:
- 2025 - MVR 666.7 million
- 2026 - MVR 850 million
- 2027 - MVR 915.8 million
The government plans to implement the destination principle starting in the second quarter of next year.
