Tourism Employees Association of the Maldives (TEAM) has stated that the government's decision to increase the Tourism Goods and Services Tax (TGST) will not impact tourist bookings.
President Ibrahim Mohamed Solih passed the Bill on Amendment to the Goods and Services Tax Act to increase the Goods and Services Tax (GST) and Tourism Goods and Services Tax (TGST) in an effort to increase state revenue. Therefore, TGST will be levied at 16% instead of 12% from January 2023 onwards.
In a press release, the Maldives Association of Travel Agents and Tour Operators (MATATO) stated that the change in the TGST rate will affect tourism and reduce the number of tourist bookings. However, in a press release published in response, TEAM stated that the tax hike is not expected to cancel existing bookings by tourists due to the change in the amount of tax. However, TEAM said it believes the change will have some impact on the profits of tour agents and tour operators.
TEAM stated the government-proposed amendment bill to increase taxes in 2023 is crucial for ensuring the growth of state revenue, a stable economy, and an increase in employee wages. The association expressed support for progressively increasing TGST, Business Profit Tax (BPT), and Income Tax, as it will reduce wealth inequality. It also added that the government should also focus on recovering unpaid taxes and land lease payments.