Page added on September 26, 2012
Commissioner General of Taxation at the Maldives Inland Revenue Authority (MIRA), Yazeed Mohamed, has named the Tourism Ministry as the prime culprit amongst state institutions which are failing to collect payments owed to the government.
“If rent on resorts is not paid, the Tourism Ministry must take action in accordance with the agreement. But so far no such action has been taken against anyone,” Yazeed told local newspaper Haveeru.
As MIRA was not party to the agreements made between certain government institutions and third parties, it could not itself enforce or implement payments, he explained.
“If rent is not paid we have to take it up in court. That is to obtain payments not paid for a certain period. Then it is used as an excuse. From that point on they get a free license to stay without making payments. Once a case is filed in court, it can go up to two years without a single payment,” Yazeed told Haveeru.
“Not everybody is penalised equally. There is no differentiation between the parties that pay the amount that is owed or the ones that don’t,” he added.
Despite not collecting payments such as land rents and associated fees, MIRA includes such figures on its monthly statistics.
The figures for August showed that ‘Tourism Land Rent’ collected last month was only 19 percent of the amount collected in the corresponding period last year.
Tourism land rent for the year so far is shown to be only three quarters of that collected by the same point on 2011.
The importance of this revenue stream can be seen in the share of overall revenue tourism land rent alone contributes to the authority’s figures – making up 10 percent of MIRA’s income this year.
Former Economics Minister Ahmed Inaz told Minivan News today that this issue was also a problem under the former Maldivian Democratic Party (MDP) led government.
“The system is not transparent or fair – under the Nasheed government or now,” said Inaz.
“The Judiciary and executive should penalise industries which are penalising the system. The system should be designed for all, not individuals,” he said.
Dr Mariyam Zulfa, Tourism Minister under the Nasheed administration, disputed the suggestion that any resort owners received preferential treatment during her tenure and said that non-compliance was always a problem, everywhere.
“Only about 10 percent of resort operators failed to comply. In every country there are those who do not comply with taxation legislation’s requirements – the Maldives is no different” she said.
MDP members have persistently linked powerful resort owners with what it perceived to be a coup d’etat which saw President Mohamed Nasheed leave office in February.
Shortly after the transfer of power, there was a re-interpretation of the legislation governing island lease extensions which Zulfa predicted would severely reduce government revenue.
“The Nasheed government had requested that those resorts extending to a 50 year lease pay in a lump sum,” she said at the time, “but while I was Tourism Minister, Gasim Ibrahim and Ahmed ‘Redwave’ Saleem kept pressuring me to let them pay on a yearly basis.”
“They didn’t want to give any money to the government, and soon after the government changed they got what they wanted. [The installments] will only be payable at the end of the current lease periods – it is a huge loss to the treasury,” she added.
MIRA’s figures show that revenue from lease period extension fees has been US$11million (MVR168million) so far this year, compared to US$20million (MVR273million) at the same point in 2011.
Minister of Finance and Treasury Abdulla Jihad told the Majlis’ Finance Committee earlier this week that state revenue was expected to be MVR3.1billion (US$200million) less than expenditure this year.
Neither the current Minister for Tourism – Ahmed Adheeb – nor the Deputy Tourism Minister – Mohamed Maleeh Jamal – were responding to calls at the time of press.