TGST Raised to 17% as Government Aims to Boost Revenue

The Tourism Goods and Services Tax (TGST) has officially increased to 17 percent, effective from yesterday. This follows a previous rate of 16 percent set in 2023. TGST was first introduced at 8 percent in 2013, after the broader GST was launched at 3.5 percent in 2011.

The Finance Ministry announced the 1 percent rise last year as part of efforts to improve the country’s fiscal condition. According to the state budget, the change is expected to bring in an additional MVR 202 million in revenue for the rest of the year.

TGST remains the largest source of tax revenue for the government. So far this year, MVR 5.6 billion has been collected through TGST—MVR 200 million more than projected in the annual budget.

The government also expects MVR 1.5 billion from Airport Development and Departure Fees and MVR 964 million from increasing the Green Tax, strengthening its revenue streams.