The World Bank has proposed significant changes to the taxation system of the Maldives.

According to the their "Seeking Stability in Turbulent Terms" report, , a significant share of the value of tourism-related goods and services delivered and rendered in the Maldives escapes taxation in the country

The World Bank said in its report that while non-resident online platforms sell vacation packages in the Maldives, the value of such goods and services is not being taxed in the Maldives currently.

They proposed two main solutions to tackle this challenge. As such they noted that the OECD’s Base Erosion and Profit Shifting (BEPS) Project can be leveraged for direct taxation, where the Maldives could tax profits made by foreign booking platforms that sell services consumed locally. This includes addressing the digital economy’s tax challenges and ensuring profits are taxed where the economic activity takes place.

For an Indirect Taxation (GST) solution, the report suggests shifting the Maldives’ Goods and Services Tax (GST) from an origin-based system to a destination-based system, which would allow the Maldives to tax foreign platforms for services consumed within the country, even if the transaction occurs offshore.

These measures aim to capture the value created by the tourism industry and ensure it is properly taxed within the Maldives.