Deputy Commissioner General of Taxation Asma Shafeeu of Maldives Inland Revenue Authority (MIRA) on Monday stated that reducing the land rent on islands leased for tourism will result in an astonishing MVR 590 million loss in projected state revenue.
Speaking at a meeting held by parliament’s Economic Committee with officials from Maldives Monetary Authority (MMA), Capital Market Development Authority (CMDA), and Maldives Association of Tourism Industry (MATI), Asma informed the committee that making the reduction will result in a 36.8 percent drop in revenue from tourism land rent. However, the government could recoup the loss by bringing in additional investments in the tourism sector.
Meanwhile, MMA Governor Ali Hashim also advised against making such a decision at this time. Hashim stated that it is not advisable to do something that would reduce our revenue, at a time when we are experiencing the Ukraine conflict and other such supply shocks. He also warned against creating a situation similar to Sri Lanka. Moreover, Hashim also advised an assessment of the potential impact the decision would have on state revenue.
Government submitted the bill to reduce tourism land rent, stating it would mitigate the loss to resorts from implementation of minimum wage.