The Parliament's Economic Affairs Committee last night passed a reversal of the recent legal amendment to tax foreign tour operators less than a month after its implementation, while also approving an increase in the GST registration threshold to MVR 1.5 million.
The 17% tax on foreign tour operators came into effect on October 1, despite facing significant criticism. However, just three days after implementation, the government announced President Mohamed Muizzu’s decision to abolish the tax.
During the Economic Committee meeting, Feydhoo North MP Ismail Nizar proposed further amendments to the Bill to Amend the Goods and Services Tax (GST) Act, which was originally submitted to repeal the tour operator tax.
Nizar proposed raising the mandatory GST registration threshold to an annual turnover of MVR 1.5 million, with the change set to take effect on January 1, 2027. Finance Minister Hassan Zareer had previously disclosed these planned changes while presenting the proposed State Budget last week.
Nizar said that the decision to amend the GST Act was aimed at fostering small business growth and reducing the challenges of doing business in the Maldives.
The amendments proposed to the committee also outline conditions under which companies with an annual turnover below MVR 1.5 million can cancel their GST registration.
Under these conditions, a business may deregister if the total value of goods and services provided over the preceding 12 months is less than MVR 750,000, and if the estimated value for the upcoming 12 months is also projected to be below MVR 750,000.
Furthermore, Nizar’s amendment grants the Commissioner General of Taxation the authority to disregard any transaction or arrangement if a company is found to have engaged in tax evasion, ensuring such actions do not affect the calculation of its tax liabilities.
The committee unanimously passed the Bill to Amend the GST Act, incorporating Nizar’s proposals to raise the GST threshold to MVR 1.5 million and officially repeal the tax on foreign tour operators.
