An amendment to the Goods and Services Tax (GST) Act was introduced in Parliament today to abolish the taxation of foreign tour operators.
The tax on foreign tour operators came into effect on October 1, despite facing criticism. However, just three days after its implementation, the government announced that President Mohamed Muizzu had decided to discontinue the tax.
The bill to repeal the tax was submitted to Parliament on behalf of the government by Kolamaafushi MP Ibrahim Didi. The proposed legislation seeks to remove all provisions related to the taxation of foreign tour operators.
The decision by Muizzu to amend the law was first announced by Tourism Minister Mohamed Ameen during the official ceremony held to mark Tourism Day.
"In relation to this matter, several industry leaders and numerous travel agents submitted requests to the President. The President has now decided to bring urgent changes to the TGST Act regarding the destination principle," Ameen said.
Speaking at the ceremony, Ameen noted that industry stakeholders had shared concerns with Muizzu following the passage of the tax.
"We previously amended the law to include additional components for paying TGST based on the destination principle. Following this, we observed major concerns within the industry, as well as from travel agents," the Minister said.
Widespread concerns were raised even before the legislation to tax foreign tour operators was passed. Russia’s largest tour operator expressed its grievances in a letter to the Maldivian government, while Indian tour operators also voiced similar concerns regarding the tax.
