The government has decided not to amend the Tourism Act to reduce the land rent of resorts operating in many parts of the country, in a bid to cushion the financial impact on resorts from the recent introduction of minimum wage.
Speaking at a press conference held today, Finance Minister Ibrahim Ameer said that the government has decided to withdraw the amendment to Tourism Act to lower the tourism land rent after considering the current global economic state caused mainly by Ukraine-Russia war. However, the whole bill has not been withdrawn.
The major amendment to the Tourism Act was proposed to reduce land rent on islands and lagoons leased for the development of resorts, hotels, yacht marinas and integrated tourism projects in two zones of the Maldives.
Deputy Commissioner General of MIRA Asma Shafeeu said that on average, MVR 1.6 billion is generated as tourism land rent per year, and that reducing resort rent may reduce the revenue by about 40 percent and a loss of MVR 590 million in state revenue. Governor Ali Hashim also warned that the bill will have a major impact on income. Noting that the war between Russia and the Ukraine is bringing major changes to the world economy, the Governor said he does not support anything that will reduce state revenue at this time.
Many have voiced their concerns about the amendment as well, saying that such irresponsible action could push the Maldives to the brink of bankruptcy, drawing comparisons to the neighbouring country of Sri Lanka.
