The Maldives is moving closer to scrapping a controversial tax rule that would have required overseas travel sellers to register for and pay tourism GST on Maldives bookings.
A parliamentary committee has backed proposals to repeal the requirement after strong objections from the travel industry.
The move would not affect the Maldives' existing 17% tourism GST, but would remove the obligation for foreign travel businesses to collect and account for the tax.
From announced delay to repeal
The rules took effect on 1 October 2026, requiring qualifying foreign tour operators, travel agencies and booking providers without a fixed place of business in the Maldives to register for and pay tourism GST on inbound tourism products and related services.
Industry groups objected to the additional costs and paperwork. Operators with holidays already sold at fixed prices also faced the prospect of absorbing costs they could not pass on to customers.
The tourism minister subsequently announced a postponement until 1 April 2027. However, UK travel association ABTA sought formal clarification because the legislation had already taken effect, leaving overseas sellers uncertain about their obligations.
The government is now seeking to remove those requirements altogether. Committee approval advances that process, but does not itself end overseas sellers’ tax responsibilities.
Related: Maldives delays 17% tourism tax on overseas tourism sellers: Travel Weekly Asia
The committee also backed raising the general annual taxable-sales threshold for mandatory GST registration from MVR 1 million to MVR 1.5 million from 1 January 2027.
That is separate from the overseas-seller repeal. Qualifying overseas tourism suppliers must register regardless of turnover, so the higher threshold would not remove their obligations.
The bill still requires a final parliamentary vote, presidential ratification and publication in the Government Gazette before the changes become law.