Tax authority MIRA should not limit its focus to corner shops, and resorts must also be audited to resolve the dollar shortage issue, MMA Governor Ahmed Munawar stated today.
Responding to a question posed by a member during today's meeting of the People's Majlis Budget Committee, the Governor stated that while the tourism industry generates USD 5.9 billion annually, only USD 3.8 billion of that enters the country's banking system. Every dollar earned by the Maldives should enter the Maldivian banking system, and intensive monitoring is currently underway to ensure this, he added.
Addressing the issue of dollar scarcity in response to a question by South Hulhumalé constituency member Dr. Ahmed Shamheed, Governor Munawar noted that while collecting business profit tax falls under the responsibility of tax authority MIRA, a large number of resorts fail to pay this tax.
"According to the figures shared with us by MIRA, out of 185 resorts, you know, roughly 50 resorts are the ones paying income tax. Only about 50 resorts pay income tax. What does that mean? Either they are not making a profit, or there are some issues, right?" the Governor said.
"So shouldn't they be audited? Their accounts need to be audited. Therefore, MIRA shouldn't just go to corner shops. We also need to check whether our tourism figures are correct."
He highlighted that if every dollar earned by the Maldives entered the banking system, it would be a sufficient amount to meet the citizens' needs. Consequently, the MMA will further tighten its efforts next year to channel every dollar into the banking system, the Governor stated.
"It needs to be monitored, you know. What happens when it is not monitored is that those dollars do not enter the Maldivian banking system. If they don't enter the banking system, what happens is that they do not circulate within the Maldives, right?" he stated.
Even with these measures, solving the dollar shortage is not something that can be achieved overnight, he noted.
Some parties argue that the solution to the dollar scarcity problem is to let the value of the dollar fluctuate in the market (floating the exchange rate).
However, he questioned why previous governments did not do so if it were a feasible action. The reason the dollar rate cannot be floated is because the price of the dollar in the market is currently determined by the black market, he added.
