OTOAI urges Maldives to reconsider 17% TGST on international travel trade.
The Maldives’ proposal to expand its 17% tourist Goods and Services Tax (TGST) to some foreign tourist enterprises starting on October 1, 2026, has alarmed the Outbound Tour Operators Association of India (OTOAI), which has called on the Maldivian government to reevaluate the clause.
There are already a number of tourism-related fees associated with Maldives vacations, such as a 17% TGST, a 10% service fee, and a US$12 daily Green Tax per person at the majority of tourist establishments. The TGST system is scheduled to expand on October 1st to include tourism sales, agency services, and booking operations carried out by foreign companies that do not have a permanent presence in the Maldives.
According to OTOAI, the Maldives has long been a popular destination for Indian tourists going abroad, and the Indian travel industry has contributed significantly to the growth and maintenance of the sector throughout time.
At a time when the travel sector is already managing geopolitical instability, growing operational costs, and difficult market circumstances, the extension of the tax and related compliance procedures might raise the cost of Maldives vacations and put additional strain on travel companies.
Concerns about reservations that have already been contracted and sold were also brought up by OTOAI. The group stated that the new tax duty could cause issues with current reservations, trade margins, and ultimate consumer pricing because Maldivian vacations are frequently booked several months in advance at predetermined prices.
Himanshu Patil, President of OTOAI stated, “We fully understand the importance of tourism revenues for the Maldives. However, we think an extra 17% tax on international travel trade could inadvertently make the Maldives less competitive at a time when the global travel industry is suffering serious difficulties.”
Therefore, we humbly ask that the Maldivian government reevaluate and remove this clause. He continued, “We would like to see this partnership grow further without adding additional pressure on travellers or the international travel trade. India and the Maldives share a strong tourism relationship.”
Before enacting policies that can have an impact on international distribution partners, OTOAI has also urged for increased collaboration between the Maldivian government, international travel trade associations, and the nation’s tourism sector.
“We implore the Maldives government to collaborate closely with prominent Maldivian industry organisations like MATATO and MATI, as well as international travel trade associations like OTOAI. A cooperative strategy can assist identify a workable solution that maintains the Maldives’ competitiveness while promoting tourism growth,” according to Patil.
“We remain committed to working together with the Maldives Government and the Maldivian tourism industry to strengthen the long-standing partnership between our two countries,” he continued, reiterating the association’s dedication to the market.
OTOAI stated that it hoped that ongoing discussions between the government and tourism stakeholders would lead to a solution that protects the Maldives’ competitiveness and its long-standing ties with foreign travel trade partners while also supporting the country’s income goals.
