Finance Minister Ibrahim Ameer announced on Wednesday that the sections pertaining to reducing resort rent in the proposed amendments to the Tourism Act has been withdrawn as instructed by the President Ibrahim Mohamed Solih.
Speaking at a press conference, Ameer said the amendment to reduce resort rent was made prior to the war between Ukraine and Russia, which started on February 24 of this year. As the war is affecting the global economic situation. the aforementioned section of the proposed amendments have now been withdrawn after discussing the matter further.
"As the situation have now changed, we have no intention to let the parliament pass the bill [as it currently is]," Ameer said.
The other proposed amendments to the Tourism Act will not be withdrawn though.
The Economic Committee meeting held at the President's Office today officially decided to withdraw the proposal to reduce resort rent.
In a prior meeting held in the parliament before this decision was made, Governor of Maldives Monetary Authority (MMA) Ali Hashim had told the Economic Committee that no action should be taken at the moment that would reduce the state income.
The Governor said that while the Russia-Ukraine war is changing the global economy, it is not good to do things that hinder the income of Maldives.
He had said it may lead to an economic crisis much like how Sri Lanka is struggling with at the moment.
Maldives Inland Revenue Authority (MIRA) had also said if the amendment to reduce resort rent was approved, MVR 590 million would be lost from state income.
Currently, the state has not receive MVR 665 million from 12 resorts as resort land rent.
An average of MVR 1.6 billion is received as resort rent every year. Therefore, reducing resort rent will reduce revenue by 40 percent.
The proposed amendment to reduce resort land rent has also drawn heavy criticism from the public.