TGST earnings see 1.4% dip compared to last year

Revenue generated by the state from Tourism Goods and Services Tax (TGST) has declined by 1.4 percent compared to last year, according to the latest information released by the Finance Ministry.

The weekly fiscal report published on Wednesday shows the state generated MVR 30.9 billion in revenue and grants as of October 1. This marks a 1.8 percent increase from the MVR 30.3 billion generated during the same period last year.

This increase was attributed mainly to a 5.8 percent increase in tax revenue, which rose from MVR 22.5 billion to MVR 23.8 billion.

The biggest weekly increase in revenue was from TGST, which rose from MVR 7.88 billion to MVR 8.06 billion. But despite the weekly increase, the figure shows a 1.4 percent decline compared to the same period last year, when the state generated MVR 8.17 billion in TGST.

While TGST declined year-on-year, airport service charge and departure tax increased by 8.2 percent from MVR 1.412 billion to MVR 1.529 billion.

Other revenue streams that saw increases include business and property tax, which rose by 21.2 percent to MVR 5.79 billion, import duty which rose by 11.4 percent to MVR 2.51 billion, and General Goods and Services Tax (GGST) which rose by 2.8 percent to MVR 4.13 billion.

Meanwhile, the overall expenditure of the state has also risen, increasing by 18.2 percent to MVR 35.5 billion from MVR 30 billion last year.

Recurrent expenditure rose by 18.5 percent to MVR 30.7 billion, with the biggest spending made on salaries, wages and pensions.

Spending on salaries and wages rose by 14.1 percent to MVR 5.56 billion.

The decline in the state’s biggest revenue generator, TGST, comes after the government rolled out a string of measures to boost revenue from tourism. In December 2024, the government raised the airport development fee and airport departure tax, and in July 2025, it raised the TGST rate from 16 percent to 17 percent.

And on October 1, the government enacted legal amendments to extend the TGST framework to offshore booking platforms, foreign tour operators and travel agents selling tourism products in the Maldives without a permanent establishment in the country.

The changes have prompted concerns from local tourism businesses and international travel industry associations.

Tourism Minister Mohamed Ameen has indicated that the government plans to make amendments to address these concerns. However, details of the proposed revisions have yet to be announced.

The decline in TGST earnings is most likely linked to the spillover effects of the Middle East conflict, with tourist arrivals still 3.5 percent down from last year.

However, the Tourism Ministry has expressed confidence arrivals will pick up during the upcoming peak season.