Maldives parliament approved Wednesday the amendments to lease islands, lands and lagoons for tourism development without a bidding process, and to charge guesthouses a Green Tax of USD 3.
The amendment was approved with parliamentarians opting for to extend time due to alleged problems with the voting system. However, members of the opposition insisted there had been no problems, and raised accusations of extending the parliament session on account of lacking enough votes to approve the amendments.
The amendment to the Tourism Act to charge guesthouses with Green Tax was submitted to the parliaments by Villimale MP Ahmed Nihan. It was approved with 45 out of the 64 members voting in favour, while 19 had voted against.
Members of the opposition Maldivian Democratic Party (MDP) had submitted six amendment to the Act, including postponement of Green Tax from guesthouses for six months, and changing the tax charged to 2 percent or 0.5 percent per night for each tourist. MDP had also pushed forward an amendment urging that Green Taxes collected from guesthouses must be utilized for environmental friendly development projects of that specific island.
Other amendments submitted include annulling the amendment stating that islands, lands and lagoons will be leased for tourism development without a bidding process once its project details are submitted to the tourism ministry. They also urged to annul the amendment stating that leases for tourism development must be executed under the Tourism Act.
However, the only amendment passed by the parliament was the amendment decreasing Green Taxes for guesthouses to USD 3.
As a result of the approved amendments, islands, lands and lagoons can now be leased for tourism development bypassing the bidding process. Such lands will be leased upon submission of the project details to the tourism ministry, under a ministry regulation. Previously, the phrase “sans a bidding process” had not been included in this regulation.
Other conditions for bypassing the bidding process include the location being environmentally acceptable for the project, full advance payment of the acquisition fee to the tourism ministry, and an experienced and financially suited contractor for the project.
Meanwhile, the proposed Green Tax for guesthouses, which will come into effect in October, was initially submitted to the parliament’s Economic Affairs Committee as USD 6 per tourist daily. However, the amount had been brought down to USD 4, and finally USD 3.
The amendment also lengthens the lease periods of islands and lands for tourism, and to propose a new period to pay the fee for lease extensions. It also aims to introduce a service charge for the ministry’s services in the tourism sector.
Moreover, the Tourism Act has been amended to authorize the sales of state shares in joint venture companies founded by the government for tourism.
Maradhoo MP Ibrahim Shareef declared Wednesday that Maldives Marketing and Public Relations Corporation (MMPRC)’s previous leases without bidding had eventually brought to light its corruption. He went on to say that the government does not intend to strengthen its integrity in light of such experiences.
Meanwhile, Kaashidhoo MP Faisal Naseem asserted that bypassing the bidding process for leasing islands will not bring in the best revenue for the state. However, he admitted he was in favour of charging the Green Tax to increase the state revenue.
Kinbidhoo MP Abdulla Riyaz was not in favour of either of the amendments, while Nilandhoo MP Ibrahim Khaleel explained that the guesthouse Green Tax was slashed from USD 6 to USD 3 following concerns raised from the industry.
Khaleel added that the revenue from leases will enter not the tourism industry, but Maldives Inland Revenue Authority (MIRA). He also highlighted the importance of establishing an integral tax collection policy.
The amendments to the Tourism Act were approved amidst conflicting concerns of tourism institutions and political personas. As such, former president Maumoon Abdul Gayoom had urged to vote against the amendments.
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