Legal changes ensure collection of green tax

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The Maldives president on Wednesday (21 September) ratified changes to the tourism law to ensure the collection of the green tax.

The green tax is levied at rates of US$3 per day from tourists who stay at guesthouses and US$6 per day from tourists at resorts, hotels and safari vessels.

“The amendment mandates the immediate application of the Green Tax—a tax levied on tourists staying in tourism facilities—which was earlier set to come into effect on January 1, 2023, as per the 11th amendment to the Tourism Act,” according to the president’s office.

“The amendment also stipulates that tourism establishments that had continued collection of the Green Tax since the ratification of the 11th amendment to the law must file their tax returns and pay the tax to the State unless reimbursed to the taxpayer. It also stipulates that funds collected as Green Tax from parties who do not fall under the purview of the law or collected more than the prescribed amount must be paid in full to the State unless reimbursed to the taxpayer.”

The law was amended to clear up confusion over tax collection after the green tax provisions were amended in July. Changes brought to apply the US$6 per day rate for guesthouses with more than 50 rooms stated that green tax collection would come into force in January 2023. Some lawyers interpreted the provision to mean that the tax could not be taken at all until January. 

The latest revisions removed the ambiguity. The president signed the bill into law on the same day that parliament voted to pass the government-sponsored amendments. 

Green tax receipts amounted to US$39 million as of July.