Parliament approves GST on offshore tour operators despite earlier assurances of industry consultation

Leader of the ruling PNC parliamentary group and Inguraidhoo MP Ibrahim Falah on Tuesday moved that the government pass the proposed amendment to impose GST on services provided by foreign tour operators and foreign booking platforms without prior consultation with the tourism industry.

The Committee of the Whole House passed the amendment in accordance with Falah’s motion. The motion was supported by PNC MP Mohamed Mamdooh.

When Falah moved the motion during the committee sitting, Hulhumale' South MDP MP Dr Ahmed Shamheed reminded the chamber that Falah had previously stated the government would only pass the amendment after consulting stakeholders in the tourism sector.

“We here are designing and making laws that affect the entire state, the people of the country, and all the businesses in the country. We are not deciding something that affects the 93 members here,” he said.

Despite his protest, the bill was passed by a unanimous vote of 64 members.

Debating the amendment moved by PNC MP Mohamed Dawood on behalf of the government, Falah had said on Sunday that the amendments would be passed only after ensuring no disruption to the tourism sector and after consultations.

“We will consult with all those working in the tourism sector in Maldives at the committee stage. We will seek their advice and guidance. The government will accept their good advice,” Falah said. He also said he was ready to attend an economic debate with former Finance Minister Ibrahim Ameer, the MDP’s presidential primary contenders and its MPs.

The bill proposed by Dawood aims to stipulate in law the services and procedures provided by offshore booking platforms, foreign tour operators and travel agents in order to implement the destination principle in Maldives. The amendment proposes to include inbound tourism services provided by a person who does not have a permanent place of business in Maldives.

In addition, the amendment will require services registered as a tourism service business to prepare tax invoices within three days of providing services.

According to the cost estimate submitted with the bill, the amendment would generate MVR 1.61 billion in annual revenue for the state.