MATATO says foreign tourism firms taxed without consultation, risk losing foreign partners

The Maldives Association of Travel Agents and Tour Operators (MATATO) has expressed extreme concern over the proposed amendment to the Value Added Tax Act to levy GST on offshore booking platforms and foreign tour operators.

In a press release, MATATO said the proposed amendment does not address the concerns of Maldivian travel agents and tour operators. The association noted that such a major change affecting Maldivian businesses has not been adequately consulted with stakeholders.

MATATO said the amendment fails to recognise the complexity of the tourism distribution system, where bookings are handled through multiple layers of global agents, consolidators, and platforms. The association said the government has not considered how these systems actually operate, nor the practical challenges Maldivian agents will face.

Press Release

MATATO: GST Amendment Fails to Address Concerns of Local Travel Agents

The Maldives Association of Travel Agents and Tour Operators (MATATO) expresses serious concern over the recently proposed amendment to the Goods and Services Tax Act relating to offshore… pic.twitter.com/FXkDuZfEIk

— MATATO - PATA Maldives Chapter (@matatoMV) August 26, 2026

In addition, compulsory registration of all foreign agents without permanent residence in Maldives is difficult to implement, MATATO said. The association added that the responsibility of educating thousands of foreign participants on Maldivian tax rules cannot be placed on local agents.

MATATO warned that these developments will reduce the advertising of Maldives by foreign agents and increase the risk of business shifting to other destinations. The association said the amendment could harm small and medium-sized Maldivian travel agencies, who rely heavily on foreign partners.

MATATO also highlighted that the amendment is set to take effect in October, even though bookings and contracts for the upcoming tourism season have already been completed. This, they said, will impose an additional financial and administrative burden on local agents. The association further expressed concern over the requirement for Maldivian agents to provide detailed information about foreign business partners for tax purposes, calling it intrusive and risky for commercially sensitive data.

MATATO said the amendment was drafted without meaningful consultation with MIRA, resorts, or major international tour operators, and warned that the lack of a reasonable transition period will create confusion and compliance issues.

The association called on local agents not to “sacrifice” themselves in efforts to increase state revenue. MATATO urged the government and MIRA to postpone implementation, conduct extensive consultations with the tourism sector, and introduce a proper transitional period before enforcing the amendment.