A proposed amendment to the Tourism Act to reduce resort land rent has been withdrawn under pressure.
The government earlier decided to amend the Tourism Act to reduce the land rent of resorts, a decision that would cut USD 590 million from state revenue. The move was rumored to be a "compensation" given to resort owners due to the introduction of minimum wage.
Speaking in Parliament in defense of the amendment, Tourism Minister Dr. Abdulla Maumoon said that the most profitable way for the state to raise money is not through land rent. He said reducing the land rent would see more resorts opening in the Maldives, increasing tax revenue.
"I can say with great certainty that in the long run, the most beneficial move for the state and the people is to expand the business and generate revenue from taxes," Mausoom said.
However, Central Bank, Maldives Monetary Authority (MMA) 's Governor Ali Hashim spoke out against the amendment. He warned that such a move at this time could affect revenue, and the Maldives could experience "what happened to Sri Lanka".
The governor was referring to the current economic crisis faced by the neighboring country.
Regarding the government's decision, Finance Minister Ibrahim Ameer said the decision to reduce tourism land rents was taken before the Russia-Ukraine war, but that the government has now decided not to introduce the amendment due to the current situation.
