The same agent called the levy "completely unworkable" and warned that it would place the travel trade "at a disadvantage to anyone who books direct".
Starting 1 October, the Maldives is introducing a Good and Services Tax, which will be levied – at 17% – on the gross profit of bookings. Every travel firm selling the Maldives will alo have to register with the Maldives Inland Revenue Authority (MIRA).
The tax will only apply to new bookings made on or after 1 October.
If the sale is made by an agent, they must pay the tax on the profit they make as will the tour operator involved in the booking. Travel agents will also be required to register with MIRA.
David Ox, Managing Director of Winged Boots, told TTG speaking to supplier contacts in the Maldives, there was uncertainty about what exactly was going on and how the tax would be implemented.
He said: “I think they will get to the point where they think it’s not practical – how are they going to do it?”
Neil Dobbs, Director of Travel Gallery, said: "The whole thing is a bloody nonsense. They are proposing a 17% tax on the margin without any allowance for costs. It’s completely unworkable because it requires every tour operator to register.
“In theory, it requires travel agents [to register] too and we have to do a monthly return on bookings and pay the tax in dollars.”
Travel Four Seasons Owner Sean Fletcher admitted he also had concerns about how the tax was going to be implemented. "It's all up in the air," he said. “It’s a pain, but the truth is we don’t know how it's going to affect us yet.
"We sell a lot of Maldives, but the business isn’t contingent on it. It’s still a concern though. We will have to adapt if it does come in, we’ll tick whatever boxes we have to and we will structure our bookings to be economically best for the client."
He added: “We’re both a tour operator and an agent. As a tour operator, it will affect us less as we can control all the elements on the ground, and put margin wherever we want – for example, as a booking fee and we sell it at net.”
'People shouting for hours during workshop'
In documents seen by TTG, travel businesses have been encouraged to share concerns and possible business impacts with the country's government if they feel the tax will reduce bookings to the Maldives.
However, with just a few days left before the tax takes effect, it is unclear how much impact this will have, although the fact Abta has written to the President of the Maldives urging the government there to give travel six months' grace on the new tax regime is perhaps a measure of the industry's concern.
Susan Deer, Abta's Director of Industry Relations, said: “We understand legislation to amend the Maldives Goods and Services Tax Act had been under consideration for some time, but was introduced without any consultation with international travel businesses. This failure to consult has resulted in legislation and guidance which is not fit for purpose."
It is understood a recent online workshop hosted by the Maldivian government, attended by hundreds of European travel industry professionals, descended into farce.
One attendee told TTG: "There was an online workshop with people shouting on it for two hours. European operators are saying we spend hundreds of thousands of euros on promoting the Maldives and the government are not interested."
The UK travel sector's two major agent consortia, The Travel Network Group and the Advantage Travel Partnership, have warned the charges could make selling the destination "commercially unviable" for the trade.
