Tourism GST receipts up 19% in April

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The tax authority collected MVR816.8 million (US$53 million) as T-GST in April, up 19% from the same period last year.

The goods and services tax from the tourism sector accounted for 44% of revenue last month. Total T-GST receipts stood at MVR3.8 billion as of April, up from MVR3 billion in the first four months of 2022.

A T-GST rise from 12% to 16% took effect on 1 January 2023. The tax covers all goods and services provided by the tourism sector, including resort supplies, travel agency services, and domestic air transport for tourists. 

The higher T-GST collection also reflects increasing tourist arrivals that have exceeded pre-pandemic levels this year. The Maldives welcomed 688,284 tourists by the end of April, whereas 646,093 tourists visited during the first four months of 2019. 

Tourist arrivals reached a milestone of half a million during the first quarter of 2023, exceeding the total of 482,978 arrivals recorded in the corresponding pre-pandemic period of Q1-2019.

Reflecting the robust growth, MVR3 billion (US$194.5 million) was collected as T-GST during Q1-2023, up from MVR2.3 billion in the same period last year. The government also received MVR523 million as tourism land rent and collected MVR3.9 million as tourism registration and license fees by the end of April.

Green tax receipts – levied on tourists at a flat rate of US$6 per day of stay – reached MVR94.9 million (US$6.1 million) in April, up from MVR87 million in April 2022. A total of US$25.6 million was collected as green tax from January to April. 

Last month, the central bank estimated tourism receipts to have reached US$4.5 billion in 2022, up 28% from US$3.5 billion in 2021. “This was a growth of 41% when compared to the US$3.2 billion registered in 2019,” according to its annual report. The gross value added (GVA) of the tourism sector was estimated “to have registered an annual growth of 22.4% during 2022, following the significant rebound of 152.0% observed in 2021.”

Tourist arrivals surpassed the government’s target of 1.6 million for 2022 and reached a total of 1,675,303 (98% of the 1.7 million tourists arrivals in 2019). Tourist bed nights increased by 22% while the average stay moderately declined to 8 days from 8.8 days in 2021.

“The increase in arrivals primarily reflected the pent-up demand from traditional source markets of Europe as well as key Asian source markets,” the central bank observed.