A bill proposing to remove Goods and Services Tax (GST) on inbound tourism products and related services supplied by businesses without a permanent establishment in the Maldives has been referred to Parliament’s Economic Affairs Committee for further review.

The Whole House Committee approved the referral today, with all 47 MPs who voted supporting the decision.

The bill, submitted by Government-aligned Kolamaafushi MP Ibrahim Didi on 26 August, seeks to reverse the GST introduced on such services from 1 October. It was referred to the Whole House Committee after completing its initial debate.

The referral to the Economic Affairs Committee was proposed by Inguraidhoo MP Ibrahim Falah and seconded by Baarah MP Ibrahim Shujaau.

The proposed amendments also seek to strengthen the Maldives Inland Revenue Authority’s (MIRA) enforcement measures against GST non-compliance and address transactions structured to obtain tax benefits.

Under the bill, MIRA’s Commissioner General would be empowered to disregard transactions deemed to have been arranged primarily to secure tax benefits. The amendments also outline circumstances that may constitute tax benefits, including reducing GST liabilities or delaying payment.

The proposed changes would take effect once the bill is passed, ratified and gazetted.

The bill states that scrapping the tax would result in the loss of previously projected revenue from inbound tourism. The Government had earlier estimated MVR 1.6085 billion in revenue from GST collected on off-show booking platforms and foreign tour operators.