TGST continues to decline with earnings down MVR 126mn from last year

Revenue generated by the state from Tourism Goods and Services Tax (TGST) continues to decline, as the latest information released by the Finance Ministry shows earnings from the key revenue source are down by over MVR 126 million from last year.

The weekly fiscal report published on Wednesday shows the state generated MVR 8.09 billion in TGST as of October 8. This marks a decline of 126.1 million or 1.53 percent from the same period last year, when the state earned MVR 8.22 billion.

The dip marks a continuation of the downward trend in TGST this month.

The decline in the state’s biggest revenue generator comes after the Maldives 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.