26/08/2026
Press Release
MATATO: GST Amendment Fails to Address Concerns of Local Travel Agents
The Maldives Association of Travel Agents and Tour Operators (MATATO) expresses serious concern over the recently proposed amendment to the Goods and Services Tax Act relating to offshore booking platforms, foreign tour operators and overseas travel agents.
While MATATO supports fair and equitable taxation, we do not believe the amendment in its current form adequately addresses the concerns of Maldivian travel agents and tour operators or provides any meaningful benefit or protection to local businesses.
Of particular concern is that MATATO and local travel agents were not meaningfully consulted by the Maldives Inland Revenue Authority (MIRA) before these significant changes were developed. For legislation that fundamentally affects the relationship between Maldivian tourism businesses and thousands of international tour operators, wholesalers, retailers and travel agencies, proper industry consultation should have been an essential part of the process.
The Maldives tourism distribution system is complex. Local agents work with extensive networks of overseas tour operators, wholesalers, sub-agents, bed banks and retailers across multiple markets. Many of these companies sell several destinations and may conduct only a limited volume of Maldives business.
The proposed framework requires non-resident suppliers of inbound tourism products to register through MIRA despite having no permanent establishment in the Maldives. Requiring every foreign agent working through a Maldivian travel company to register is, in practical terms, extremely difficult to implement and enforce.
Local travel agents cannot be expected to become responsible for identifying, educating, monitoring or effectively policing hundreds or thousands of overseas business partners for the purposes of Maldivian tax compliance.
There also appears to be an assumption that imposing additional taxation and registration requirements on foreign operators will automatically benefit local agents. MATATO does not believe this is necessarily the case.
Foreign operators are an essential part of the distribution network through which Maldivian travel agents receive business. If Maldives becomes administratively difficult or commercially less attractive to sell, foreign partners may reduce Maldives inventory, consolidate through larger global platforms, contract directly with hotel groups or divert business to competing destinations. In such circumstances, local SMEs may be among the first businesses affected.
MATATO is also concerned about the timing of the proposed changes. The amendment is intended to take effect from 1 October 2026, shortly after its submission in August. Much of the upcoming tourism season has already been contracted, priced and sold. Resort agreements have been signed, brochures printed, packages distributed and bookings confirmed.
Introducing a major change to the taxation of those transactions after commercial agreements have already been concluded risks forcing either the foreign operator, the Maldivian supplier or ultimately the traveller to absorb additional costs. A reasonable transition period and protection for existing contracts are therefore essential.
The amendment itself also recognises the complexity of the issue by proposing that offshore intermediaries be taxed on their margin rather than taxing the full value of a tourism product that has already been subject to TGST in the Maldives. However, substantial practical issues remain regarding bundled holiday packages, international airfares, rebates, incentives, foreign exchange movements and the verification of overseas operator margins.
These matters should have been fully discussed with local agents, resorts, major international tour operators and tax professionals before implementation.
MATATO is particularly concerned about the potential requirement for local agents to provide extensive information on their overseas partners. A travel agent’s foreign partner database represents years, and in some cases decades, of investment and relationship building. It contains commercially sensitive information relating to clients, suppliers, source markets, negotiated relationships and business strategy.
The Maldives still has a developing data-protection framework, and MATATO believes commercially sensitive data should not be collected on a broad scale without strong safeguards governing confidentiality, access, retention, audit trails and penalties for misuse.
There have been longstanding concerns within the private sector about conflicts of interest and the potential misuse of commercially valuable information accessible through public institutions. MATATO believes businesses are therefore justified in seeking stronger protection before being required to disclose extensive client or partner databases.
Local travel agents should not become collateral damage in an attempt to increase government revenue.
Maldivian travel agencies employ Maldivians, pay taxes locally, invest in destination marketing and maintain international relationships that bring significant tourism revenue and foreign currency into the country. The proposed amendment provides local agents with no significant new protection, no competitive advantage and no reduction in their existing obligations, while potentially creating additional compliance burdens and commercial risks.
MATATO therefore urges the Government and MIRA to reconsider the implementation of the amendment and undertake meaningful consultation with the tourism industry.
MATATO recommends an appropriate transition period for existing contracts, reasonable registration thresholds for overseas operators, a clear distinction between B2B and B2C transactions, simplified compliance for non-residents, stronger commercial-data protections and a comprehensive assessment of the potential impact on local travel agents, tourism arrivals, destination competitiveness and foreign-exchange earnings.
MATATO supports the principle that foreign businesses should comply with legitimate tax obligations when conducting taxable activities in the Maldives. However, taxation must be practical, proportionate and developed with a clear understanding of how the international tourism distribution system operates.
The people and businesses that negotiate these contracts, maintain international partnerships and bring tourists to the Maldives must be part of that process.
Local travel agents were not meaningfully consulted, their concerns remain unresolved, and MATATO does not believe that the amendment in its present form will strengthen or protect Maldivian travel agents.
MATATO calls on the Government and MIRA to engage with the industry and address these concerns before implementation.
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