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Tax concessions to revolutionize Addu City's economic landscape

13 June 2023, MVT 22:29
President Ibrahim Mohamed Solih and President Office's Policy Secretary Ahmed Hamdhaan at the Viyavathi Conference held in Laamu atoll Gan -- Photo: President's Office
13 June 2023, MVT 22:29

According to Policy Secretary Ahmed Hamdhan, the government is working towards providing tax concessions for businesses involved in the economic transformation of Addu City.

Hamdhan tweeted that the that the current administration held Addu City's development in high regard and highlighted the ongoing initiatives to fulfil this objective. In addition to promoting tourism, the government aims to provide tax concessions to businesses dedicated to transforming the City's economic landscape.

According to Hamdhan the land rent for resorts in Addu City has been significantly reduced to encourage tourism. While land rent has been reduced from USD 8 to USD 2 per square meter, the maximum payable lease rent has been reduced from USD 2 million to USD 800,000 starting from January 2021.

Hamdhan highlighted that the current administration has taken steps to address the issue of Shangri-La, which was previously overlooked by past governments. The government has provided a loan in alignment with the shareholders agreement and is actively working to make its shares available for public trading.

The government recognized the need for additional interventions in Addu to foster tourism development, leading to its decision to invest in and implement new projects in the region. Work is ongoing in Addu to reclaim 3 islands of 8.3 hectares each and 2 islands with 5 hectares each, for the purposes of tourism.

Hamdhan said that 500 rooms will be developed for the market from the newly reclaimed islands. He added that the government is actively making arrangements to lease these rooms while simultaneously working on the development of these islands.

Points highlighted by Hamdhan;

● An integrated resort is set to be established in Hankede, with a flagship project valued at 143 million dollars. The project will encompass the development of 14 hotels, as well as villas and apartments. In total, the project will provide 2082 beds, and work on it is scheduled to commence soon.

● The Hankede project is designed to create multiple economic opportunities for residents of Addu City, with every establishment in Hankede having the potential to be leased out to local businesses for operations.

● The Hankede project entails the development of four guest houses, each with 75 rooms, across the inhabited islands in Addu City, introducing a total of 300 rooms.

● SME Development Finance Corporation (SDFC) will facilitate financing in line with contractor financing principles to start construction of guesthouses on land already leased for this purpose.

● These projects have a repayment period of 15-20 years and will add approximately 2,870 beds to the local tourism sector. A total of 44 parties have already expressed interest for 58 plots of land allocated for guesthouses. ● Addu International Airport (AIA) Company has contracted a developer to undertake the redevelopment of Dhoogas Hotel, located in Gan. As part of this project, a modern hotel with 130 rooms will be built in Dhoogas.

According to Hamdhan, plans are underway to establish an additional hotel with 50 rooms in Gan. This project, which will be partially financed by private shareholders of the Addu International Airport (AIA), is expected to be finalized and signed soon.

Hamdhan states that these investments will increase Addu's bed capacity by over 7,000, quadrupling the current capacity.

“Upon the completion of government-funded projects, Addu City will witness the addition of around 7,000 beds to the current capacity of 1,528 beds (including those in Shangri-La). This is four times the current bed capacity of Addu City,” said Hamdhan.

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