Government collects over USD 279 million from Tourism GST

MMPRC's efforts have increased tourism revenue by milions over previous years, with the tax authority collecting more than USD 370 million by July 2022.



Undoubtedly, the Maldivian tourism industry has accomplished a lot so far in 2022; however, some are questioning whether they have accomplished enough. 

This question arose after the Maldives Marketing and Public Relations Corporation (MMPRC) revealed how much money is spent on the extensive marketing campaigns that they have been running. MMPRC has revealed that by July 2022, they will have spent more than MVR 105.2 million on various campaigns aimed at different markets, such as the campaign aimed solely at the South East Asian market.

This spending did not only include marketing campaigns but also participation in award shows and tourism fairs, which cost around MVR 45.5 million and MVR 59.7 million in promotional materials, respectively.

MMPRC spent a total of MVR 135 million for 2021 and MVR 70 million for 2020 by the middle of this year, which is relatively higher compared to previous years. 

However, given that the Maldives will be celebrating 50 years of tourism in 2022, extensive marketing and promotional spending in the tourism industry is likely. And, while many may question whether these expenses are worthwhile, given that the Maldives spent over MVR 100 million to reach the millionth tourist arrival mark in August 2022, there are other factors to consider.

MMPRC's efforts have increased tourism revenue by millions over previous years, with the Maldives tax authority collected over USD 370 million by July 2022. Furthermore, the green tax imposed on tourists arriving in the Maldives has generated total revenue of USD 39.7 million (MVR 608 million), compared to USD 27.9 million during the same period last year.

Total GST from the tourism sector (TGST), was recorded at USD 279 million by the end of July 2022, compared to USD 193 million same period last year. 

While the government had set a target of 1.8 million tourist arrivals in 2022, with arrival rates already exceeding a million by August 2022, total arrivals may be higher than expected. In addition to the ongoing campaigns, the resumption of flights to the Maldives following COVID-19, has aided tourist arrivals this year.

Following the COVID-19 pandemic in 2020, borders in most countries were closed for nearly two years, and several flights are only now resuming service on some routes. Kuwait Airways, for example, plans to resume flights to the Maldives twice a week beginning October 31, 2022.

Kuwait is a significant contributor to the Maldivian tourism industry, with over 4,000 tourist arrivals from the country in the first six months of 2022, and with Kuwait Airlines flights resumed, these numbers are expected to rise further. 

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