Universal Enterprises also notifies new Forex Regulation cannot be complied with

Chairman of Universal Enterprises Mohamed Umar Manik (M U Manik) has sent a letter to the governor of Maldives Monetary Authority (MMA) stating that they cannot comply with the new Tourism Forex Regulations.

The regulation mandates income generated from tourism to be deposited into local banks and to have a certain percentage exchanged via these banks, while the banks are required to sell 60 percent of foreign currency received each week to MMA.

Category A includes resorts, hotels and tourist vessels. Those that fall within this category must deposit USD 500 per guest every month in a local bank.

Category B includes guesthouses, which must deposit USD 25 per guest every month in a local bank.

As per the regulation, dollar deposits must commence from end of January 2025 onwards. In January, the deposits must meet the number of guests the resort accommodated in October.

In the letter, Universal stated that a fixed charge of USD 500 per guest with no consideration of special offers, length of stay, room rates, and such is unfair to resorts operating at different market segments.

“It is simply impossible for a property with a rate of USD 250 hosting a family of 4 for four nights and generating USD 1000 to convert USD 2000 into MVR,” the letter reads.

The letter also pointed out that ninety percent of the expenses in operating a resort are incurred in USD such fuel, staff salaries, online operator and card commissions and so on. Also included are the lease rent, TGST and Green Tax.

It declared that all accounts of the Universal Group are maintained in the Maldives, and the group is diligently complying with the recent changes in tax regulation.

However, Universal maintains that they will not be able to comply with the new forex exchange regulations, stating that keeping the regulation in place may ‘compel [us] to take decisions that have a detrimental impact on the industry’.

The letter urged the government to reconsider the terms in the regulation, describing the current regulations as being impractical and inequitable.

Universal committed to support the government in achieving its objectives, but said that any policy must take into consideration the existing reality of tourism operations.

Universal operates eight resorts in the Maldives, including Huvafenfushi Maldives, Milaidhoo Maldives, Kuramathi Maldives, Velassaru Maldives and Kurumba Maldives. M U Manik is recognized as one of the pioneers of the Maldives tourism industry.

Yesterday, Champa ‘Uhchu’ Mohamed Moosa also sent a letter to the MMA requesting the suspension of this regulation.

He, too, stated that the regulation is unjust in taking such measures targeting businesses in the tourism industry, adding concerns that implementing this would cause immense loss.