Minister of Economic Development and Acting Minister of Tourism Fayyaz Ismail announced on Monday that the state is set to propose amendments over lands rented for resort tourism in certain atolls and inhabited islands.
The minister asserted that this move would serve to boost investments, encouraging tourism across Maldives archipelago.
According to Fayyaz's tweets, the proposed land rent for resorts in Shaviyani and Gnyaviyani Atoll will be reduced to USD 2 per square meter, with a cap of USD 800,000, while the land rent for resorts in Haa Alif Atoll and Haa Dhaalu Atoll will be leased for USD 4 per square meter with a cap of USD 1 million.
Moreover, USD 6 per square meter shall be proposed as land rent for resorts in Shaviyani, Thaa, Laamu, Gaafu Alif and Gaafu Dhaalu Atolls. The cap on these leases will be placed at USD 1.5 million.
To boost local tourism and guesthouse businesses, the state plans to introduce a fee of USD 1 per square meter for built-up areas of inhabited islands in Shaviyani and Gnaviyani Atoll, with a cap of USD 400,000.
A rate of USD 2 per square meter shall be proposed for built-up areas of inhabited islands in Haa Alif and Haa Dhaalu Atolls, with a cap of USD 500,000, while USD 3 per square meter is to be implemented as land rent for inhabited islands in Shaviyani, Thaa, Laamu, Gaafu Alif and Gaafu Dhaalu Atolls.
The state will also propose a cap of USD 800,000 for the latter atolls.
Land rent of USD 4 per square meter will be proposed for all other atolls, Noonu, Raa, Baa, Lhaviyani, Kaafu, Alif Alif, and Alif Dhaalu, with a cap of USD 1 million.
In April, the World Bank estimated that Maldives will be the worst-hit country in the South Asian region, in the ensuing economic regression caused by the pandemic. The island nation was listed as one of the three countries that will see negative growth in the region, with GDP output estimated to contract by as much as 13 percent.
Meanwhile, the Ministry of Finance projected that the state deficit would reach MVR 13 billion this year compared to the MVR 5.9 billion originally stated in the 2020 State Budget, as a result of economic repercussions caused by the COVID-19 pandemic.
The ministry also projected that the total state debt sans guarantee would increase to MVR 70 billion, which accounts for 86.6 percent of Gross Domestic Product (GDP). An overall 115 percent drop is projected in the GDP, along with 81.3 percent for nominal GDP.
In a bid to counteract the financial impact of the COVID-19 pandemic on the local economy, Maldives government introduced an economic relief fund with MVR 2.5 billion intended to prevent the closing down of local businesses and the loss of jobs.
With the opening of the country's borders on July 15 and the restart of the tourism industry, the state is gearing up to implement various economic recovery plans to help the country recover from the social and economic impacts of the health crisis, enhance resilience and increase government revenue.
Land rent is the second-largest source of income for the state, after the revenue collected as various forms of tax.