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Revenue generated from Green Tax falls below MVR 4 million

Shahudha Mohamed
20 September 2020, MVT 12:45
The Grand Park Kohdhipparu resort. The Green Tax collected by the state has fallen below MVR 4 million due to the effects of the ongoing COVID-19 pandemic on the tourism industry. PHOTO: GRAND PARK KOHDHIPPARU
Shahudha Mohamed
20 September 2020, MVT 12:45

Statistics publicised by the Ministry of Finance revealed that the state revenue collected as Green Tax fell below MVR 4 million in June, after following a downward trend since the beginning of the year.

As per the ministry's report, the government collected a total of MVR 84 million as Green Tax in January, with most of the income collected from resorts in Male' Atoll. This value decreased each month, resulting in a revenue of MVR 3.9 million collected as Green Tax in June.

A total of MVR 77 million was collected in February, while this value slipped down to MVR 74 million in March. April saw a significantly steep drop, collecting only MVR 35.7 million, consisting of MVR 12.6 million generated from Male' Atoll of which MVR 26.8 million was paid by resorts.

In May, after another steep drop, only MVR 7.9 million, of which MVR 3 million came from Male' Atoll, was collected as Green Tax.

As with numerous countries around the world, in the wake of the ongoing COVID-19 pandemic, Maldives closed its air and sea borders to tourist arrivals on March 27, halting the issuance of on-arrival visas until July 15.

Despite the lifting of restrictions, Maldives has noted a significant reduction in tourist arrivals compared to pre-COVID figures, with the ministry revealing that only 11,629 visitors were recorded between July 15 and September 8.

The restrictions on international travel left Maldives' heavily tourism reliant economy in an extremely vulnerable state. In mid-April, the World Bank projected that Maldives would be the worst-hit economy in the South Asian region due to the pandemic.

Overall, the Maldivian government estimates a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency and a state deficit of MVR 13 billion in 2020 as a result of the COVID-19 pandemic's impact on the tourism industry.

Charged at a rate of USD 6 per day, Maldives first introduced Green Tax in 2015. The tax has previously been criticized by environmental advocates, as the revenue generated is not solely utilized to mitigate any damage that may be caused to the environment, via the travel industry or otherwise.

The tax, levied on all foreigners without a resident visa, was applicable solely to resorts, hotels and safaris until guest houses were added to the list in October 2016.

The region of Kaafu Atoll, which boasts the largest number of resorts and guest houses, is also the archipelago’s biggest contributor to Green Tax.

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