In a sweeping reform aimed at reclaiming lost revenue, the Maldives is set to amend its Goods and Services Tax (GST) Act next year, targeting the pervasive issue of “tourism leakage.”
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The Finance Ministry’s technical officials have underscored the need for this amendment, pointing out that the current system is unsustainable. By adopting the destination principle, the Maldives aims to not only plug the revenue leaks but also to ensure that online platforms contribute their fair share to the national treasury.
In addition to this pivotal change, the government is also looking to bolster its revenue streams by increasing the Airport Development Charge (ADC) and green tax. Finance Minister Mohamed Shafeeq has indicated that these measures are part of a broader strategy to revise the state’s medium-term debt approach, aiming to enhance revenue generation while simultaneously curtailing expenditures.
With plans to implement these changes by mid-2025, the Maldives is poised to take significant strides in securing its financial future, ensuring that the wealth generated from its thriving tourism sector is reinvested back into the nation.
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