TGST revised to 17%, effective from July 1

Effective yesterday, Tourism Goods and Service Tax (TGST) is charged at 17 percent.

Previously, the figure was at 16 percent since 2023. Prior to this, TGST had been set at 12 percent.

The government announced an increase of 1 percent in TGST last year. This move was amongst government efforts to increase revenue to improve the fiscal situation of the country.

The annual budget projects that this increase in TGST will yield an additional MVR 202 million in revenue within the remainder of the year. It further estimates that MVR 1.5 billion through Airport Development Fee and Departure Fee, as well as MVR 964 million through increasing the Green Tax can be earned.

Among taxes, TGST accounts for the highest revenue for the State. As of now, MVR 5.6 billion has been received as TGST this year. As per Finance Ministry statistics, this is MVR 200 million more than estimated in the annual budget.

In 2011, the government introduced 3.5 percent GST. Under the laws governing GST, tourism related tax TGST was introduced from 2013 onwards. Initially, TGST was charged at 8 percent.