Legislature to double green tax and raise airport taxes sent to committee

Two separate bills submitted by the government to double the Green Tax and raise the Airport Departure Tax and the Airport Development Fee has been accepted into the Parliament and sent to the Whole House Committee for review.

The Parliament took the vote on the bill to amend the Tourism Act – sponsored by South Machangolhi MP Mustafa Hussain, and the bill to amend the Airport Taxes and Fees Act – sponsored by Gemanafushi MP Asadullah Shihab – on Wednesday afternoon, following preliminary debates.

Both bills passed with a majority vote of 58-10.

They have both been sent to the Whole House Committee for review.

The tourism bill will see Green Tax doubled from 3 percent to 6 percent for guesthouses and from 6 percent to 12 percent for resorts and city hotels.

The changes are designed to take effect on January 1, 2025.

Meanwhile, the airport taxes bill will see Airport Departure Tax and the Airport Development Fee raised from USD 30 to USD 50 for foreign ‘economy class’ passengers, from USD 90 to USD 120 for both local and foreign ‘business class’ passengers, from USD 90 to USD 240 for ‘first class’ passengers, and from USD 120 to USD 480 for passengers who depart of private jets.

The changes are designed to take effect on December 1, 2024.

The Whole House Committee is also reviewing a third bill submitted by the government - to raise the Tourism Goods and Services Act from 16 percent to 17 percent.

Lawmakers from the main opposition Maldivian Democratic Party (MDP) are critical of the planned tax hikes, which they warn will cause significant damage to the country’s tourism sector. They also said that the government should first reduce its unnecessary spending before raising taxes.

However, government lawmakers claim the tax hikes are in the best interest of the public.

The Finance Ministry estimates the tax hikes will raise tax revenue by nearly MVR 3 billion.