The proposed amendment to the GST Act submitted to the People’s Majlis focuses on implementing the “Destination Principle” rather than simply increasing tax rates. This measure aims to integrate offshore booking platforms, foreign travel agents, and tour operators into the national tax framework. The primary objective is to bridge the pricing gap between tax-compliant Maldivian businesses and non-tax-paying foreign entities, thereby ensuring a level playing field within a competitive market. According to MIRA, the full implementation of this principle—already adopted by over 60 countries worldwide—is projected to generate an additional MVR 1.6 billion in state revenue. As this is a tax borne by the service consumer, it is anticipated that there will be no significant adverse impact on businesses. Furthermore, major international corporations are expected to comply with this legislation to maintain their competitive pricing and market presence.
