The revenue generated via the newly introduced 'Departure tax' will be adequate to repay next year's payment for the loans borrowed to develop Velana International Airport (VIA).
On July 11, President Ibrahim Mohamed Solih ratified a new amendment to the country’s Airport Taxes and Fees Act, which introduced a departure tax for any traveler leaving the Maldives beginning on January 1, 2022. The tax is applicable to locals and tourists and for any airport in the country. The Airport Service Charge, which is currently in effect, will be discontinued on December 31, 2021, before the Departure Tax comes into effect.
As per the new amendment, residents of the Maldives will need to pay $12 if they are traveling in economy class. Meanwhile, non-residents must pay $30 for economy class. For business class, a departure tax of $60 will be charged for both Maldivian locals and tourists and $90 for First-class. The fee is $120 for those flying on private charter jets.
Projections calculated by Maldives Inland Revenue Authority (MIRA)'s former auditor, Ahmed Ali, show the revenue generated as Departure Tax would cover the loan repayment cost for 2022 for the Airport Development Project. The government estimated MVR 769 million as Departure Tax in 2022 and MVR 874 million in 2023. The revenue is expected to increase to MVR 960 million in 2024.
The government borrowed loans from eight lenders, including the government entities, to finance the MVR 1 billion airport development project:
- Bank of Maldives: MVR 273 million
- China EXIM Bank: MVR 5.1 billion
- Saudi Fund for Development: MVR 588 million
- Abu Dhabi Fund for Development: MVR 111 million
- OPEC Fund: MVR 272 million
- Ministry of Finance: MVR 123 million
- China Development Bank: MVR 727 million
The total borrowings add up to MVR 7.5 billion or $ 488 million. While the repayment for 2022 is calculated to be approximately $ 37.4 million (MVR 577 million), the revenue generated by Departure Tax would be more than enough to cover the repayment cost, leaving a surplus of about MVR 200 million.
