Domestic flight fares increased with new rate of TGST

As the rate of Tourism Goods and Services Tax (TGST) shifts from 6% to 12% today, domestic flight ticket prices have also been increased by the same amount.

When called today at the ticketing counter, both Fly Me and Maldivian, two airlines which offer domestic flight services currently, confirmed that ticket prices would include 12 per cent tax from today onwards, and that tourists and local travelers would not be treated as different categories.

However, the change has not been reported by the airlines formally.

Ahmed Adeeb, Minister of Tourism, has previously stated that the change would be for tourists only and that fares for local travelers would not change.

“TGST will increase to 12 per cent. However, that is only for tourists, and from the general public, only the general Goods and Services Tax (GST) would be charged”.

When GST was introduced by a 2011 Act, the rate was 3.5 per cent. From January 2012 till December that year, the rate was statutorily set at 6 per cent, and starting with January 2013, the rate is 8 per cent.

An amendment to the 2011 tax Act effected on 6th February this year set that taxes on goods and services provided for the tourism sector would be 12 per cent starting from 1 November 2014.