New Tax Regulations Prompt Cruise Liners to Rethink Maldives Itineraries
Cruise liners are reconsidering their itineraries to the Maldives in light of the recent increase in prices and taxes levied on foreign tourist vessels arriving and docking in the Maldives, according to the Maldives Association of Yacht Agents (MAYA). The concerns stem from the revised ‘Regulation governing foreign tourist vessels cruising and harbouring in Maldivian waters,’ enacted in September 2023.
MAYA, an organisation that facilitates the visits of cruise liners to the Maldives, has reported cancellations of previously planned trips to the Maldives by some cruise liners. A cruise ship scheduled to arrive on 14 December with over 1,500 passengers cancelled its trip, according to MAYA.
“The lack of clarity in the new guideline has prompted complaints from cruise ship operators regarding the tax payment process. The government must contemplate the potential ramifications before implementing a new guideline. This could conceivably result in a financial burden amounting to millions of dollars for the state,” said Mohamed Ali, the Secretary General of MAYA, in an interview with local media. He added that the organisation had already made extensive arrangements for the cruise liners’ arrival before they cancelled their trip.
“We have made substantial investments in preparations, given that the cruise ship was scheduled to dock in Uligan, Haa Alifu Atoll, and Addu City. However, we were subsequently notified of the cancellation. Had it not been for the cancellation, the liner would have arrived in Uligan on 14 December. We discovered that it had been rerouted to the Seychelles, which presents a significant challenge,” Ali told local media.
In response to the concerns raised by MAYA, Minister of Tourism Ibrahim Faisal assured that the government would address this concern promptly. In a post shared on X (formerly Twitter), he said, “We are actively revising the guidelines established by the previous government. I want to assure everyone that, with God’s will, we will be able to overcome the challenges soon.”
The regulation mandates the appointed agent of the cruise ships to ensure that any fees or taxes owed to the government are paid to the Maldives Inland Revenue Authority (MIRA) before the ship departs. It also states that if a foreign tourist vessel, measuring over 20 metres in size, stays in the country for more than seven days after customs clearance, MIRA will impose a US$1,000 fee for a cruise permit.
Under the new guidelines, a 16 percent Goods and Services Tax (GST) is levied on the daily rate for each passenger room on cruise ships. This change has significantly impacted the decision-making of cruise lines, with many opting to divert to alternative destinations.
A total of six cruise lines visited the Maldives in 2022, bringing in an average of 700 to 2,000 passengers per ship. According to experts in the tourism sector, the cruise line tourism industry is crucial to the Maldives’ tourism sector, as passengers stay overnight in tourist resorts and guesthouses. They also visit local islands, boosting local island tourism, as this drives sales of souvenirs and guest shops on local islands.
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