Maldives Tariff Structure and Rates

1. Overview of the Tax System

The Republic of Maldives operates a relatively simple tax regime that is primarily based on three major components:

• Goods and Services Tax (GST) a valueadded tax applied to the supply of goods and services.
• Import Duties levied on most goods entering the country.
• Excise Duties applied to selected products such as tobacco, alcohol, and petroleum.

All taxes are administered by the Ministry of Finance through the Maldives Inland Revenue Authority (MIRA). The rates listed below reflect the most recent legislation (as of 2024).

2. Goods and Services Tax (GST)

The GST is a flat rate tax of 12% applied to most intranational transactions. The tax is collected by businesses at the point of sale and remitted to MIRA on a monthly basis.

2.1 GST Exemptions

The following categories are exempt from GST:

• Basic food items (e.g., rice, flour, fresh fish)
• Prescription medicines and medical services
• Educational services provided by recognized institutions
• Financial services (e.g., interest, insurance premiums)

2.2 GST Registration Threshold

Businesses with an annual turnover of MVR2,000,000 (approximately USD130,000) are required to register for GST. Voluntary registration is permitted for smaller entities.

3. Import Duties

Import duties are calculated on the Customs value of the goods (cost, insurance and freight CIF). The Maldives follows a twotier schedule:

3.1 General Duty Rates

3.2 Special Preferential Rates

Several trade agreements grant reduced or zero rates for eligible goods, notably:

• SAFTA (South Asian Free Trade Area) 0% on qualifying products from SAARC members.
• EU-Maldives Cooperation Framework 0% on approved sustainable goods.

3.3 Customs Valuation

In addition to the advalorem duty, a standard 5% customs processing fee and a 2% port handling surcharge are applied to all imports.

4. Excise Duties

Excise duties target products considered harmful to health or the environment. The rates are specific (per unit) or advalorem, depending on the product.

4.1 Tobacco Products

4.2 Alcoholic Beverages

4.3 Petroleum Products

Petroleum products are subject to an advalorem excise of 8% on top of the import duty. This includes gasoline, diesel, and kerosene.

4.4 Environmental Levies

A flat MVR3 per kilogram is charged on plastic packaging that is not recyclable, aiming to curb singleuse plastics.

5. Corporate Tax

While not a tariff, corporate tax is relevant for firms operating in the Maldives:

• Standard corporate tax rate: 15%
• Smallscale tourism operators (annual turnover < MVR1,500,000) may qualify for a reduced rate of 10%.
• Foreignowned entities that do not conduct business onshore are taxed at a flat 20% on income derived from Maldivian sources.

6. Practical Implications for Businesses

Understanding the tariff landscape is essential for budgeting, pricing, and compliance. Key points to remember:

1. Costplus pricing Add GST, import duty, and any excise duty to the landed cost to determine the final selling price.
2. Documentation Accurate commercial invoices, certificates of origin, and tariff classification (HS codes) are mandatory to claim preferential rates.
3. Compliance calendar GST returns are due by the 15th of the following month; import duty payments must be settled before cargo release.
4. Customs brokerage Engaging a licensed broker can reduce clearance times and help avoid misclassification penalties.

7. Recent Reforms (20232024)

To improve revenue collection and align with international standards, the Maldivian government introduced several changes:

• Broadening the GST base by removing the exemption on certain luxury services.
• Introducing electronic filing for GST and corporate tax, cutting processing time by 30%.
• Negotiating new preferential trade agreements with Southeast Asian nations, reducing duties on renewableenergy equipment to 0%.
• Implementing a digital excise tracking system for tobacco and alcohol to curb illicit trade.

8. Sources & Further Reading

• Ministry of Finance Maldives Tax Legislation 2024
• Maldives Inland Revenue Authority Official Website
• World Bank Doing Business in Maldives (2024 edition)
• International Trade Centre HS Code Classification Guide