Will increase dollar reserve, lessen burden on public: Minister Shafeeq

Minister of Finance Dr Mohamed Shafeeq has said that in the coming days, there will be major changes to ensure dollar retention in the Maldives, but assured that these changes will be brought in a manner that does not burden the public.

Bank of Maldives yesterday announced changes to dollar transaction limits on their cash cards, with cards linked to Maldivian Rufiya accounts no longer being allowed to make any foreign transactions. This led to wide public outcry, including Maldivian students currently living abroad, those abroad for medicals and residents in the country itself.

With the severe backlash, the bank reversed the decision later yesterday.

A press conference was held at the President's Office yesterday to address this issue, where Minister Shafeeq that an action such as that must not have been taken without prior notice.

"Our government will work to ensure that such a thing is not repeated," he said.

He said that one of the main actions planned to achieve this is to bring about changes that will contribute towards increasing the dollar reserve.

Three decisions were reached regarding this in yesterday's cabinet meeting, he said. That is to change regulations so that companies which earn revenue via USD must pay their taxes, pension contributions and Customs duties in USD.

The Minister also highlighted that while Maldives earns a significant amount of dollars through the tourism industry, only a small portion of this is circulated in the local economy. He emphasized the importance of structuring the industry so as to minimize tourism leakage and ensure the tourism revenue reaches the public.

The government has also compiled a reform agenda for reducing State expenditures and to increase revenue. Responding to a question posed by Mihaaru, the Minister revealed that the reform measures were set to be implemented mid-year, but owing to the severity of the measures, it requires major preparation and planning.

"We are working towards making these efforts sustainable. The liquidity issues we are facing now is also a major challenge in carrying forward the reforms. In changing blanket subsidies to targeted subsidies, we have to consider how and to whom we will implement it, the system has to be planned well," the Minister said.

"We are going forward strategically. Delays are costly, but it would be far more costly if we commence something and then cannot carry it through."