Taxing the Middleman Twice: Why the GST Bill on Overseas Agents Won't Work

Published analysis

Read the full article on Maldives News: Taxing the Middleman Twice: Why the GST Bill on Overseas Agents Won’t Work

Bill on amendment to the Goods and Services Tax Act (No. 10/2011), submitted 15 August 2026, first reading. MIRA, Tax Bills: https://www.mira.gov.mv/Pages/View/taxbills (bill PDF: https://www.mira.gov.mv/Files/GetFile/ae474260-539b-4106-a837-d9df49cd04c9)
Corporate Maldives, “Bill Seeks GST Registration for Foreign Travel Agents and Booking Platforms” (16 August 2026): https://corporatemaldives.com/offshore-booking-platforms-could-bring-mvr-1-6-billion-in-annual-gst-revenue/
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Key facts

A government-backed GST Act amendment, submitted 15 August 2026 by Kulhudhuffushi North MP Mohamed Dhawood, would make foreign tour operators, overseas agents and offshore booking platforms register with MIRA and charge 17% TGST on Maldives travel sales from 1 October 2026.
The government projects MVR 1.6085bn (about USD 103m) a year in new revenue, against MVR 2.8m one-off and MVR 5.1m recurrent costs; the estimate implies a newly taxed base of roughly USD 614m that the bill’s papers never show.
With input credits, GST on an intermediary captures only 17% of its margin: on a USD 1,000 room resold at USD 1,300, net new revenue is USD 51; without credits, the same room value is taxed twice.
Commission-model bookings (Booking.com, Expedia) are already taxed at both ends: resorts remit TGST on the full retail price, and agent commissions carry a 10% non-resident withholding tax (s.55(a)(6), Income Tax Act), enforced by MIRA since at least 2016.
The political backdrop is the Finance Ministry’s leakage claim: of roughly USD 5.6bn in tourism receipts last year, only about USD 3.2bn entered the Maldivian banking system.
The Maldives has almost no double-taxation treaty network, and the bill states no method for carving the Maldives portion out of package prices, leaving MIRA no practical means to test allocations.