Tourists Face Steep Rise in Exit Fees Starting December 1
The Maldives is raising its departure taxes, adding to the already expensive experience of visiting the tropical paradise. From December 1, 2024, all non-Maldivian travelers will face significantly higher exit fees, with the cost of leaving the country set to rise by as much as 400%. Here’s what you need to know:
Increased Departure Taxes Across All Classes
The new departure tax, announced by the Maldivian Inland Revenue Authority (MIRA) in November, will affect travelers departing from Velana International Airport (MLE), the nation’s primary international transit hub. The revised fees apply to all non-Maldivians, regardless of nationality or age, and will be added directly to the price of airline tickets.
- Economy Class passengers will now pay $50 (Rs 4,221), up from the previous fee of $30 (Rs 2,553).
- Business Class passengers will see their fees increase to $120 (Rs 10,132), up from $60 (Rs 5,061).
- First Class fares will jump to $240 (Rs 20,264), compared to the previous $90 (Rs 7,599).
- Private Jet passengers will face a dramatic rise to $480 (Rs 40,528), up from $120 (Rs 10,132).
The exit fee increase is set to apply regardless of the length of stay, whether a visitor stays for a few hours or several days. This policy is part of the Maldives’ broader efforts to generate funds for the maintenance and development of its infrastructure, particularly the Velana International Airport.
Additional Tax Hikes on the Horizon
While the departure tax increase is a major change, it’s not the only tax hike coming to the Maldives. Starting January 2025, the Maldives will double its green tax on tourists. The new rates are as follows:
- Resorts with more than 50 rooms will see the green tax rise from $6 (Rs 500) per tourist per day to $12 (Rs 1,000).
- For smaller resorts with fewer than 50 rooms, the green tax will increase from $3 (Rs 250) to $6 (Rs 500).
- Children under the age of two will be exempt from the green tax.
Looking further ahead, from July 2025, the Maldives will also increase its Goods and Services Tax (GST) from 16% to 17%, as per changes passed by the Maldivian Parliament in October 2024.
Context: Economic Pressures and Foreign Exchange Crisis
These tax hikes come amidst growing financial pressure on the Maldives, which is facing a foreign exchange crisis. In a bid to combat this, the Maldives has imposed currency exchange controls and is mandating that all foreign currency earned by the tourism sector be deposited in local banks. The International Monetary Fund (IMF) has warned of a potential debt crisis for the island nation, with its foreign reserves dropping significantly over the past year. According to Fitch Ratings, the Maldives’ external debt obligations could reach up to $1 billion by 2026.
While the government argues that these tax hikes will help stabilize the country’s finances, some in the tourism industry are voicing concerns. A local business owner warned that these increased taxes could have a devastating impact on the industry. An international hotel chain CEO expressed concern about the timing, calling for a delay to allow the industry time to adjust to the new changes.
Government’s Revenue Expectations and Industry Pushback
Despite the backlash, the Ministry of Finance expects the tax increases to raise Rs 8 billion in revenue. This additional income will be invested in the country’s Sovereign Development Fund to support future development initiatives. However, the local tourism sector remains worried about the long-term effects of these increased costs on their operations.
In response to these changes, tourism stakeholders are urging the government to reconsider the timing of the tax hikes, noting that many businesses have long-term contracts that may not reflect the new fees. While they do not oppose the tax increase itself, they seek a delay to ensure the Maldives tourism industry can adjust to these new financial burdens.
Key Takeaways:
- The Maldives is raising departure taxes by as much as 400% starting December 1, 2024.
- The increase affects all non-Maldivian travelers, with higher fees based on travel class and mode of transport.
- Green taxes on tourists will also rise in January 2025, with some resorts seeing doubling of fees.
- The Maldives’ economic crisis and growing external debt are driving these tax hikes, which have sparked concern in the tourism sector.
As the Maldives grapples with its financial challenges, travelers and industry professionals alike are adjusting to the new costs that come with visiting this island paradise.
