Government holds talks with tourism leaders amid tax and foreign exchange concerns
Senior government officials have met Maldivian tourism industry leaders amid concerns over recent changes to tourism taxation and foreign currency conversion requirements.
The meeting on Monday was attended by Tourism and Civil Aviation Minister Mohamed Ameen, Economic Development, Transport and Trade Minister Mohamed Saeed, Finance Minister Hassan Zareer, Attorney General Ahmed Usham and Commissioner General of Taxation Fathimath Ameeza.
Tourism industry representatives at the meeting included Crown Company Chairman Hussain Afeef, known as Champa Afeef; Sun Siyam Group Chairman Ahmed Siyam Mohamed; and Villa Group Managing Director Siyad Qasim.
The Tourism Ministry said discussions focused on increasing tourist arrivals, achieving the tourism targets set for 2027 and addressing challenges facing the industry.
The ministry said several key targets were agreed upon based on proposals and recommendations from industry representatives. It also said the discussions reflected the government’s intention to work closely with tourism stakeholders on issues affecting the sector.
The meeting comes amid industry concerns over two recent policy changes affecting the tourism sector.
One relates to foreign currency conversion requirements for resorts. The new framework requires resorts to convert 40 per cent of their foreign currency revenue through the domestic banking system. The previous requirement allowed resorts to convert either 20 per cent of foreign currency revenue or USD 500 per tourist.
The second issue concerns amendments to the Goods and Services Tax Act extending the 17 per cent Tourism Goods and Services Tax (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 amendment establishing the framework was ratified on 31 August.
Implementation of the new provisions began on 1 October, with the Maldives Inland Revenue Authority requiring overseas suppliers of inbound tourism products to comply with the new requirements. The changes prompted concerns from local tourism businesses and international travel industry associations over their commercial and operational impact.
Two days after implementation began, Tourism Minister Ameen announced that President Mohamed Muizzu had decided to make further changes to the framework following concerns raised by tourism stakeholders and travel agents. Details of the proposed revisions have yet to be announced.
Parliament resumed sittings on Monday following a two-month recess, but the proposed amendments have not yet been submitted.
