Maldives Says It Will Delay Its Tax on Overseas Agents
The Maldives Government will postpone its new tax on overseas travel businesses until April 2027. ABTA welcomed the reports and said it is seeking formal confirmation of the postponement.
Susan Deer, ABTA's director of industry relations, said the Maldives tourism minister has said implementation will be postponed. "It was reported in Maldives media that implementation of the tax will be postponed until April 2027," she said. ABTA says the law came into force on 1 October and the association wants to know how the levy applies to travel agents.
What the Tax Does
The eighth amendment to the Goods and Services Tax Act brings overseas travel agents, tour operators and offshore booking platforms into the Maldives tax net. President Dr Mohamed Muizzu ratified the amendment on 31 August. Collection began on 1 October.
The Maldives Inland Revenue Authority charges 17 per cent on the margin. An operator pays on what the traveller pays, less what is payable to the Maldivian supplier. An agent that charges a booking fee pays on that fee. No registration threshold applies to the supply.
Accountants Still Point to 30 October
Travel Gossip reported on 13 October that travel companies selling the Maldives have been advised to prepare to register by 30 October, despite the reported delay.
Naomi Quant, indirect tax director at the travel accountants Xeinadin, said the firm has been unable to verify the reports with the Maldivian authorities. She said accounting firms in the region are advising operators to prepare for registration by 30 October 2026 until there is official confirmation of the delay and a change to the legislation.
Holidays already booked and paid for fall outside the charge. The time of supply is taken as the point when the booking is paid for.
Still No Official Confirmation
Luke Petherbridge, ABTA's director of public affairs, told the ABTA Travel Convention in Madeira that the UK Government has confirmed it has heard the tax is not being enforced. He said the Maldives authorities are considering the best mechanism to proceed. ABTA has still not received official confirmation from the Maldives Government.
ABTA has worked with the UK High Commissioner and international associations to put members' concerns to the Maldives Government.
The Trade Wants a Transition Period
The Travel Network Group urged the Maldives Inland Revenue Authority in September to introduce a transition period. Its chief executive, Gary Lewis, criticised the lack of consultation with the trade and said some agents and operators would question the destination's commercial viability.
Garry Wilson, chief executive of easyJet holidays, told the convention that the tax was unfair on destinations that have built large positions. Mark Tanzer, ABTA's chief executive, said the money raised should go back into tourism infrastructure or to residents.
ABTA has called for agents that act on behalf of a named tour operator to be exempt from the tax. The association wrote to tourism minister Mohamed Ameen on 27 August, before ratification, and asked the government to pause implementation and consult. It represents around 3,500 UK travel brands with combined turnover above £41 billion.