Malé, Maldives – Governor of Maldives Monetary Authority (MMA), Ali Hashim on Monday warned against reducing the resort rent as per the proposed amendment to Maldives Tourism Act (Act No. 2/99).
Speaking at the Maldives Parliament, the governor highlighted the economic crisis in Sri Lanka as a cautionary tale and warned against reducing the resort rent, as proposed by the government, in a bid to cushion the financial impact on resorts from the recent introduction of minimum wage.
We must not take actions to decrease revenue at a time when the supply side is suffering from major global impacts.
Governer Hashim advised against taking any action that will cause a major impact on the state revenue, amid the side shocks from the Russia-Ukraine invasion.
The governor also urged for cooperation to run economic predictions following the reduction of the resort rent, depending on the size of the islands and geographic zones. Governer Hashim noted that such an analysis was not conducted prior to the amendment.
Reducing the resort rent will result in a loss of roughly MVR 590 million.
MIRA
Minister of Tourism Dr Abdulla Mausoom has previously stated that the approximate revenue loss due to resort rent reduction will be MVR 407 million, with a significant increase in tax benefits. The Minister also stated that lowering the resort rent will solve the issue of 80 new developments that are currently stalled.
