A policy on levying TGST on tourism services provided by off-shore travel agents and booking platforms will be introduced by the Maldivian government next year.
According to the budget details released by the Finance Ministry, the service provided by off-shore booking platforms is different from other digital services. The ministry noted that although the service providers and recipients are based abroad, the tourist establishments booked are established in the Maldives and provide services in the Maldives.
The ministry highlighted that, under current industry practices, the majority of tourist bookings are made through foreign tour operators and offshore agents. These agents purchase room bookings in bulk from Maldivian providers at discounted rates, then “on-sell” them to individual tourists. As per the current GST system, these “on-sell” transactions are not subject to GST, nor is the commission earned by offshore agents.
The government also recently decided that the TGST rate will be increased from 16 percent to 17 percent next year. This change is expected to raise an additional MVR 308.1 million next year.
