Male’, Maldives —The Chairperson of the Budget Committee and the MP for Kinbidhoo constituency, Mohamed Nashiz has stated that as the Business Profit Tax (BPT) report of some resorts show that they have not received even 1% profit in the year 2020 and that this is something that cannot be believed by anyone.
The Budget Committee met with committees of the Tourism Ministry yesterday to discuss about ways to retain USD inside the country. These committees include of Guesthouse Association, Yacht Associations and Travel Agencies & Tour Guide Associations.
During the meeting, Nashiz stated that the Budget Committee has also discussed with MIRA and gathered information regarding dollars in Maldives. Nashiz mentioned that one of the things that caught his attention is that the Business Profit Tax (BPT) report of some resorts show that they have not received even 1% profit in the year 2020
I wouldn’t say all resorts, but the profit margin of some of the resorts are less than one percent. This shows that something is amiss.MP Mohamed Nashiz, Chairperson of Parliament Budget Committee
While majority of the income Maldives receives is through the Tourism Industry, about 90% of the foreign currency that Maldives receives is also through the Tourism Industry. However, experts have stated that Maldives is able to hold only about 20% of the income the country gains from the Industry.
The President of the Guesthouse Association, Abdullah Nasheed stated that the main reason for cash outflow is because 80% of the resorts are being controlled by foreign investors or owners. Nasheed suggested that a solution for this could be anticipating how much income a bed would provide and by taking out approximately 100 beds and monitoring them to see whether the anticipated amount is reached.
Nasheed also stated that one possibility for cash outflow may be because majority of the tourists who arrive to Maldives come via travel agents. However, a member of the Guesthouse Association highlighted that the guests who arrive to guesthouses come to Maldives through online booking and that the money that guesthouses receive through them will go directly to the Maldivian bank accounts.
Nasheed noted that the new offer for foreign investors being able to invest upto 49% of the guesthouses in Maldives may appear as another issue in cash outflow as currently, the guesthouse sectors are 99% owned by Maldivians.