The Travel Network Group (TTNG) has urged the Maldivian Government to introduce a transition period ahead of a new 17% tourism tax, which comes into force on 1 October.
It comes after the Maldives Inland Revenue Authority (MIRA) confirmed that overseas agents and operators will be brought into the country’s Goods and Services tax (GST) for the first time.
The GST will apply to accommodation, transport, food and other tourism services, such as excursions and wellness activities, delivered in the Maldives. Affected agents and operators will also be required to register with MIRA.
Reacting to the announcement, TTNG Chief Executive Gary Lewis criticised the lack of consultation with the trade and called on the MIRA to allow travel businesses more time to adapt.
He said: “A key concern raised by many of our members is the lack of consultation and engagement with the international travel trade ahead of these changes. Overseas travel businesses play a vital role in driving tourism to the Maldives, yet many are now being asked to understand and prepare for an entirely new compliance regime within a relatively short timeframe.
“We are urging the Maldives authorities to work closely with overseas trade partners and consider a transition period that gives businesses adequate time to familiarise themselves with the registration and compliance requirements before enforcement begins.
“The UK travel trade has invested significant time, expertise and marketing resources into building demand for the Maldives over many years. We want to continue seeing the destination thrive, but that will require collaboration, practical support and recognition of the important role overseas travel businesses play in delivering visitors to the islands.”
Gary also warned that UK sales of Maldives holidays could suffer due to the GST, with some agents and operators likely to question the destination’s ‘commercial viability’, and shift focus to alternatives such as the Seychelles, Zanzibar or the Caribbean.
“That would not reflect any reduction in the appeal of the Maldives,” he added. “Rather, it would be a consequence of the additional complexity and cost involved in selling it.”
TTNG said it is now working with specialist advisors to better understand the implications of the new regime and is encouraging its members to share feedback and real-world examples of how the changes could affect their businesses.
The organisation added it will continue to monitor developments, engage with stakeholders and provide ongoing guidance and support to members as further information becomes available.
