Article · September 2026
Levelling the playing field: why the new TGST amendment could be good for local tour operators
The same amendment could remove a structural disadvantage for Maldivian DMCs, if the additional revenue comes with a visible commitment to reinvest in the industry.
Most of the debate around the new TGST amendment has focused on what it means for foreign tour operators. But there is another important question: what does it mean for Maldivian businesses competing with them?
For years, a local DMC and an overseas operator could sell the same Maldives holiday under very different tax realities.
A Maldivian travel agency operates within the local tax and regulatory system. Meanwhile, an overseas travel company or online platform could sell the same resort stay, earn a margin from it, and in many cases keep that income outside the Maldivian GST system.
The Eighth Amendment to the GST Act has the potential to change that dynamic.
A more balanced competitive environment
Maldivian DMCs already compete with some of the world's largest travel companies and online platforms. They cannot always match their marketing budgets, technology or global reach.
Their strength lies in local knowledge, resort relationships, responsiveness, destination expertise and the ability to solve problems on the ground.
Bringing non-resident operators within the TGST framework could reduce a structural disadvantage and allow those strengths to matter more.
A stronger role for local DMCs
There is another potential benefit.
As overseas operators become more involved in Maldivian tax compliance, established local DMCs could become increasingly valuable partners.
Navigating resort arrangements, local suppliers, transfers, excursions and relevant tax requirements is easier with strong local expertise. This creates an opportunity for Maldivian DMCs to strengthen their position within the international tourism supply chain.
Government commitment and reinvestment
Closing tax loopholes can create a more equitable framework. But for the industry to truly benefit, the conversation cannot end with additional tax collection.
If these compliance changes bring meaningful additional revenue into the national budget, there should also be clarity on how that additional revenue will be reinvested into the tourism ecosystem.
This is where government commitment becomes important.
The industry should be able to see a clear strategy for strengthening destination marketing, supporting local DMCs and tourism businesses, developing new markets, improving connectivity and investing in the long-term competitiveness and sustainability of the destination.
This does not mean these efforts are not already happening. The point is that additional revenue from the industry should come with a visible commitment to strengthening the industry.
Greater transparency around that strategy, together with continued collaboration between government and the private sector, would give both local and international tourism partners greater confidence in where the Maldives is heading.