Tourism represents roughly 21 per cent of the Maldives’ gross domestic product (GDP) and is a multi-billion-dollar industry. Despite decades of strong growth, many Maldivians have questioned why this wealth has not translated into markedly higher living standards for ordinary citizens. The country’s small population makes the contrast even more striking; for example, a single multinational such as Walmart employs more people than the entire Maldivian population.

A key reason lies in the limited inflow of foreign-currency earnings to the domestic economy. Citizens have long expressed concern that, aside from tax revenues and the salaries of Maldivian employees, most tourism income is transferred to foreign banks and never circulates locally.

President Dr Mohamed Muizzu’s Administration has acted to ensure that Maldivians gain more direct benefit from the tourism sector. Its strategy combines measures to increase tourist arrivals, strengthen foreign-exchange regulations, and raise tax revenues from tourism earnings.

A cornerstone of this approach is the Foreign Currency Bill, ratified on 12 December 2024 and effective from 1 January 2025. The legislation establishes a framework requiring businesses operating under Maldivian law to exchange foreign currency from realised sales proceeds with domestic banks. These banks must then sell a set proportion of the exchanged currency to the Maldives Monetary Authority (MMA), helping to retain more foreign currency within the country.

Within three months of the bill’s implementation, President Dr Muizzu announced on the President’s Office podcast Rayyithunnaa Eku, that deposits of USD 150 million had been remitted to Maldivian banks, a 40 per cent increase compared with earlier figures.

The Government has also pursued initiatives to drive record visitor numbers. Tourist arrivals surpassed two million in 2024, the highest in Maldivian history. To sustain this momentum, work to open the new Terminal 1 at Velana International Airport was accelerated. In January 2025, the national carrier Maldivian introduced its first wide-body aircraft, which now flies to Shanghai, Beijing and Chengdu. With China established as the Maldives’ top tourism source market since 2024, these direct flights strengthen the national airline’s role and channel more revenue into the domestic economy.

To ensure that tourism revenue benefits Maldivian citizens even further, the Tourism Goods and Services Tax (TGST) was increased to 17 per cent from 1 July 2025. The Maldives Inland Revenue Authority (MIRA) has since reported tax receipts exceeding projections, and the adjustment is expected to generate an additional MVR 200 million for the State. President Dr Muizzu has also announced plans to amend the law so that a portion of tourism tax revenue will be allocated directly to local councils, supporting development at the community level.

Through tighter foreign-exchange regulations, record-breaking tourist arrivals and higher tax yields, the Government is working to ensure that the financial rewards of the Maldives’ signature industry are shared more equitably. These measures represent a decisive shift toward retaining tourism earnings within the country and improving the living standards of Maldivian citizens.