TGST and GST Hike Approval by Parliament

maldives gst and service charge

Thursday, 17th November 2022

The People’s Majlis of Maldives has passed the bill to increase Tourism Goods and Services Tax (TGST) and GST (Goods and Services Tax) to boost the government’s revenues while the service charge for resort workers will remain the same at 10%.

With the passing of the amendment, TGST, which was at 12%, will be increased to 16%. The GST which was in the past at 6% will go up to 8%.

A total of 55 lawmakers voted in favour of passing the amendment to the Goods and Services Tax Act submitted by MP from Ihavandhoo constituency Mohamed Shifau on behalf of the government. Only 26 lawmakers voted not to pass.

Last month, Finance Minister Ameer stated that increasing the TGST and GST is the most significant step in increasing government revenues, as it will allow the government to control its recurring expenditures. As per him, the proposed tax hikes will bring in USD 137 million in TGST and USD 63 million in GST.

The government has collected MVR 5.1 billion in TGST from January to September of this year, including MVR 389.2 million in September.

About Service Charge in Maldives

All resorts in Maldives are paying monthly Service Charge to their staff in USD and this money is collected from the Guests as Service Charge and distributed to all staff equally, regardless of the salary or the grade/position. The salary package in Maldives is basically the basic salary and service charge, plus other allowances vary from resort to resort. Every service provided by businesses operating in the tourism industry in Maldives shall levy a service charge in an amount not less than 10%. 

For candidates who are going to accept a Job Offer from one resort from more than 170 Resorts in Maldives, it’s important for you to consider the average service charge of this resort.

To check the updates of Service charge in Maldives you can always refer to our page here.

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