Tourism will decrease by 10% if TGST increases: MATATO


The Maldives Association of Travel Agents and Tour Operators (MATATO) has revealed that if taxes are increased next year, there will be a 10% drop in the tourism sector.

According to a statement released by MATATO, a survey was conducted among more than 300 operators bringing tourists to the Maldives following the government’s decision to increase the TGST.

The survey results showed that if the prices of Maldivian tourism services are changed due to the increase in taxes, it will have a negative impact on the economy of the country.

The government has decided to increase the GST from 6% to 8% and the TGST from 12% to 16% next year. This decision was welcomed by the International Monetary Fund (IMF) and the World Bank.

MATATO said that although the Maldives experienced an influx of tourists in a short time after the borders reopened to all travelers on July 15, 2020; an increase in the prices of services in the tourism sector due to the increase in tax rates will have an impact on the country’s economy.

Indeed, beach destinations such as Thailand, Bora Bora and Indonesia have also reopened their borders.

MATATO said the tax increase will affect SMEs in the tourism sector, pointing out that bed and breakfast businesses will be hit hard. Therefore, the association asked the government to reverse its decision to increase taxes.

MATATO also met with an IMF team last week to share his concerns about the tax hike.

MATATO said the global economic slowdown has started to affect the tourism sector. The organization said discounts ranging from 30 to 40 percent for rooms were being offered during this year’s summer season. According to them, an increase in taxes would make it difficult to offer such a significant reduction to tourists.

MATATO asked the government to take other measures to reduce public spending instead of increasing the TGST.


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