The Maldives Inland Revenue Authority (MIRA) has issued a circular to inform tourism facilities of forthcoming changes to the Tourism Goods and Services Tax (TGST) that will take effect on 1 July 2025.
The circular outlines that, following the seventh amendment to the Goods and Services Tax Act, the TGST rate will increase to 17% from the current 16%, starting 1 July. The new rate must be applied if the "time of supply" of a transaction occurs on or after the specified date, according to MIRA.
In preparation for this change, MIRA advised all GST-registered individuals and entities in the tourism sector to implement necessary system updates in advance. This includes ensuring that the prices of goods and services reflect the new rate in time for the transition.
The circular also details specific cut-off times for the rate change. For tourism sector businesses operating 24 hours a day, the TGST rate applicable to supplies made before 00:00 hours on 1 July 2025, remains at 16%. Supplies made at or after 00:00 hours on 1 July 2025, according to MIRA, will be subject to the 17% rate. Other tourism sector GST-registered entities must apply the 17% rate from the time of opening their business on 1 July 2025, MIRA added.
MIRA also advised all tourism facilities to ensure their systems are updated accordingly and to communicate the new pricing to their customers.