GST and TGST in the Maldives explained: rates, who pays and how it works

Goods and services tax (GST) is part of almost every purchase in the Maldives, from groceries in Malé to a night at a resort. The country has two GST rates, which can be confusing for newcomers, and the tourism rate changed in July 2025. This guide explains the two rates, who they apply to, how the July 2025 change was handled, and what businesses need to know about collecting GST.

What is GST?

GST is a tax on the supply of goods and services. Registered businesses add it to the price they charge, collect it from customers, and pay it to the Maldives Inland Revenue Authority (MIRA). Businesses can usually deduct the GST they paid on their own business purchases (input tax) from the GST they collected (output tax), so the tax is ultimately borne by the final consumer.

GST is governed by the Goods and Services Tax Act, which has been amended several times. MIRA administers it, issues guidance and circulars, and processes registrations and returns.

The two rates

General sector: 8%

Most goods and services sold in the Maldives outside the tourism sector are taxed at the general rate of 8%. This covers everyday purchases such as electronics, clothing, restaurant meals in Malé and most professional services. Some supplies are zero-rated or exempt under the law; check MIRA's guidance for specific items.

Tourism sector: 17% (TGST)

Goods and services supplied in the tourism sector are taxed at a higher rate, commonly called TGST. This includes accommodation and services at resorts, hotels, guesthouses and tourist vessels, and other supplies made by businesses registered in the tourism sector.

From 1 January 2023 to 30 June 2025, the tourism rate was 16%. From 1 July 2025, it is 17%. The general rate stayed at 8%.

Why the tourism rate changed

The increase came from the seventh amendment to the GST Act, one of three tax law amendments ratified by the President on 5 November 2024. The amendment set the 17% tourism rate to start on 1 July 2025, giving businesses several months to prepare. The same package of amendments also included changes affecting the tourism sector and airport fees.

How the July 2025 switch was handled

MIRA issued a circular explaining which rate applies to transactions around the changeover. The rate depends on the time of supply:

• Businesses operating 24 hours (such as resorts): supplies made before midnight on 1 July 2025 were taxed at 16%; supplies made from 00:00 on 1 July 2025 onwards at 17%.
• Other tourism-registered businesses: apply 17% from the time they opened for business on 1 July 2025.

For bookings that span the date, or were paid in advance, the time of supply rules in the GST Act decide which rate applies. Businesses with complex cases should follow MIRA's circular or take advice.

Staff cafés in tourist establishments

A separate change applies to cafés inside tourist establishments that operate only for employees. Sales at these staff cafés are taxed at the 8% general rate, not the tourism rate, from 5 November 2024.

What it means for shoppers and residents

• Everyday purchases in Malé and on local islands generally carry 8% GST.
• Tourist services, such as a resort stay, excursion or guesthouse meal, carry 17% TGST, plus a service charge where applied, and the separate green tax on accommodation.
• Check invoices. Registered businesses must issue proper tax invoices showing the GST charged. If you are claiming business expenses, you will need them.

Calculating GST: quick formulas

To add GST to a price before tax:

• General: price × 1.08. Example: MVR 1,000 + 8% = MVR 1,080.
• Tourism: price × 1.17. Example: MVR 1,000 + 17% = MVR 1,170.

To find the GST inside a price that already includes it:

• General: price ÷ 1.08 = price before tax. Example: MVR 1,080 ÷ 1.08 = MVR 1,000, so the GST is MVR 80.
• Tourism: price ÷ 1.17 = price before tax. Example: MVR 1,170 ÷ 1.17 = MVR 1,000, so the TGST is MVR 170.

A common mistake is to take 8% (or 17%) of the total price to find the tax included. That overstates the tax: 8% of MVR 1,080 is MVR 86.40, not the MVR 80 actually included.

What businesses need to know

Who must register

Businesses must register for GST in certain situations, including when their taxable supplies exceed MVR 1 million in the past 12 months or are expected to in the next 12. Importers must register, and anyone supplying tourism goods and services must register regardless of turnover. Others can register voluntarily. The details are in our guide to registering for GST with MIRA.

Charging the right rate

The rate depends on whether a supply falls in the general or tourism sector, which in turn depends on the business's registration and the nature of the supply. Businesses with both tourism and general activities need to register and account for each correctly.

Tax invoices and records

Registered businesses must issue tax invoices showing their taxpayer identification number, the GST amount and other required details. Keep sales and purchase records, as MIRA can ask to see them.

Filing returns

Businesses with turnover above MVR 1 million file GST returns monthly; smaller registered businesses can file quarterly. Returns and payments are due by the 28th of the month following the end of the tax period. Returns are filed online through MIRA's systems.

GST and the green tax: not the same thing

Visitors often see both on their bills. TGST is a percentage of the price of tourism goods and services. The green tax is a fixed amount per person per night of accommodation (USD 12, or USD 6 at smaller guesthouses on inhabited islands, from January 2025). They are separate taxes. See our guide to the green tax.

Common questions from businesses

We are a café on a local island serving tourists and locals. Which rate do we charge?

It depends on your registration and the nature of your business. Supplies by businesses registered in the tourism sector are taxed at the tourism rate, while general businesses charge 8%. MIRA's rules on how mixed activities are treated are detailed, so check your registration and MIRA's guidance, or ask MIRA directly.

Can we change our prices on the day the rate changes?

Yes; that is exactly what the time-of-supply rules are for. When rates change, update your point-of-sale system and price lists to take effect from the correct time, and check how advance payments and bookings are treated.

What if we charged the wrong rate?

Correct it as soon as you notice. Undercharging still leaves you liable for the correct tax, and penalties and fines can apply. MIRA allows corrections through its systems; talk to an accountant if the amounts are significant.

Service charge is not GST

Many restaurants, resorts and guesthouses add a service charge, commonly 10%. This is not a tax, and it is distributed to staff under the rules that govern it. On a tourism bill you may therefore see the price, a service charge, TGST at 17% and the green tax as separate lines. When comparing prices, add them all up.

Keep up to date

Tax rates and rules change. The figures in this guide reflect MIRA's published schedule at the time of writing. Before making significant decisions, check MIRA's GST pages and recent circulars, or ask a Maldivian tax adviser.