Amendment seeks to double Green Tax, increase TGST and airport taxes

The government has submitted a bill to the parliament seeking to double Green Tax, levied on tourists, and increase Tourism Goods and Service Tax (TGST) and airport taxes.

Crucial three bills have been submitted to the Parliament by the government as the Parliament is set to reconvene after recess on Monday.

West Maafannu MP Mohamed Musthafa sponsored the government-backed bill to amend the Goods and Service Tax Act. The amendment proposes increasing the TGST percentage from 16 percent to 17 percent starting next June.

The bill cites restoring the sustainability of the state’s finances and debt as the purpose of submission. In this trajectory, MVR 201.9 million has been projected in the bill as revenue which will be earned via TGST next year.

South Mahchangolhi MP Musthafa Hussain sponsored the government-backed bill to amend the Tourism Act. It proposes to double the Green Tax levied on tourists and in this regard, charge USD 12 per day from tourist establishments currently charging USD 6 per day and charge USD 6 per day from tourist establishments currently charging USD 3 per day starting from next year. MVR 963.6 million in projected in the bill as revenue which will be earned next year with these changes.

The third bill is the bill to amend the Act on Tax Levied on Outbound Travelers at Maldivian Airports. The government-backed bill sponsored by Gemanafushi MP Assadhulla Shihab proposes to increase Departure Tax starting from next year’s December.

No changes have been proposed to USD 12 charged from locals traveling outbound in economy class. However, the bill proposes to increase USD 30 charged from foreigners traveling outbound in economy class to USD 50.

It proposes to increase USD 90 charged from local and foreigners traveling outbound in business class to USD 120.

The USD 90 charged from locals and foreigners traveling outbound in first class is proposed to be increased for USD 240 and the USD 120 charged from individuals traveling on private jets is proposed to be increased to USD 480.

Additionally, it was also proposed to increase the Airport Development Fee at the same rate as the Departure Tax.

The bill projects to earn MVR 769.5 million in Departure Tax and MVR 809.8 million in Airport Development Fee.

The government is seeking these changes as Maldives face difficulties in managing its debt burdens. World Bank has expressed concern last week, citing delays in reformative action by the government.

With tourism industry taxes set to be increased, Maldives has recently publicized new regulations that mandate all tourism revenue to be deposited to local banks; a move that has garnered criticism from industry stakeholders.