Maldives: barely in force, the new 17% tax on foreign tour operators has already been called into question

Selling a week in a hotel on stilts in the Maldives from Paris or London, without having any office in the archipelago, may now be of interest to the Maldivian tax authorities. Since October 1, tour operators, travel agencies and reservation platforms established abroad have been subject to a new 17% tax on the tourist services they market in the country. A provision that the government is already seeking to eliminate.

Ratified on August 31 by President Mohamed Muizzu, the reform provoked an outcry. Professionals initially criticize him for his haste. Stays in the Maldives, particularly those marketed by European tour operators, are negotiated and often sold several months in advance. It is difficult, under these conditions, to integrate an additional charge into packages whose prices have already been set. The German travel federation DRV also denounced the registration formalities with the Maldivian tax administration and the legal uncertainties of the system.

The government eventually backed down. On October 19, a repeal bill was tabled in Parliament. The text was still under discussion this Monday, October 26.

Nearly 90 million euros in abandoned tax revenue?

However, the tax had something to interest public finances. According to the assessment by the Maldivian Ministry of Finance accompanying the bill, its extension to foreign operators was expected to bring in 1.61 billion rufiyaa per year, or around 90 million euros. Revenues that the authorities are now willing to sacrifice so as not to penalize the marketing of the destination.

We still need to understand what was taxed. Contrary to what the rate of 17% might suggest, the levy did not apply to the entire price of a trip. In a guide published in September, the Maldivian Tax Administration (MIRA) details the case of a British tour operator purchasing six hotel nights for $2,457 and reselling them for $3,194.10 to his client. The tax owed by the intermediary then reaches $107.10, calculated from its commercial margin.

The repeal project also provides for the reimbursement of any sums collected since October 1. But as long as Parliament has not definitively adopted the text, and it has not been ratified and then published, the reform will remain legally in force.

Tourists will continue to pay 17% VAT

For the Maldives, caution is not superfluous. According to the Maldives Monetary Authority, the country's central bank, the archipelago welcomed 2.25 million tourists in 2025, 9.8% more than the previous year. Tourism revenue reached $5.57 billion. France, with 58,078 visitors, an increase of 6.3%, ranked eighth among source markets.

But 2026 looks less favorable. According to the Maldivian Ministry of Tourism, 1.65 million visitors were recorded between January 1 and October 14, or 3.9% less than the same period in 2025. This slowdown, which began well before the tax came into force, comes as the archipelago remains dependent on international airlines and foreign distributors to fill its resorts.

Should we therefore hope for cheaper stays? Not necessarily. The tax that the government wishes to eliminate should not be confused with the tourist VAT, or Tourism Goods and Services Tax (TGST), already charged in establishments in the archipelago. According to MIRA, its rate has remained set at 17% since July 2025. To this is added the Green Tax, levied at $12 per person per night in resorts, or $6 in small eligible guest houses on inhabited islands. Children under two years old are exempt.

Malé's decline therefore concerns the taxation of intermediaries who sell the Maldives abroad, not the taxes paid by tourists in establishments. For travelers who have already booked their vacation, there is no automatic reduction to expect on the bill.