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Page added on January 29, 2014

PPM MPs support abolishing tourism bed tax

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Deputy leader of the ruling Progressive Party of the Maldives’ (PPM) parliamentary group Moosa Zameer has supported abolishing tourism bed tax if the Tourism Goods and Service Tax (T-GST) is raised from 8 to 12 percent.

Reintroducing the US$8 tourism bed tax, which was discontinued on December 31, 2013, is among the raft of revenue raising measures proposed by President Abdulla Yameen.

However, speaking at an eleven member sub committee set up to review the government’s revenue raising measures, Zameer said that government aligned MPs now believed bed tax should be abolished if T-GST were to be increased.

Finance Minister Abdulla Jihad has denied any change in the government’s stance.

“It has not changed. And if the government does not go on with the bed-tax, the numbers will not match in the budget,” Jihad told Minivan News.

According to the Madives Tourism Act, bed tax must be abolished within three years of the introduction of T-GST. The Finance Ministry has said discontinuation of bed tax will cost the state MVR100 million (US$ 6.4 million) every month.

The government expects MVR3.4 billion (US$ 224 million) from revenue raising measures. These also include revision of import duties, raising airport departure charge for foreign passengers from US$ 18 to US$ 25, leasing an additional 12 islands for resort development, introducing GST for telecommunication services, and collecting resort lease extension in advance.

Government aligned MPs requested the People’s Majlis hold an extraordinary session during the ongoing recess, contending that failure to pass the revenue raising measures will hamper the implementation of the 2014 budget.

Meanwhile, the Maldives Association for Tourism Industries (MATI) has questioned the practicality of collecting resort lease extensions in a lump sum.

Speaking at the sub committee yesterday, Secretary General of MATI Ahmed Nazeer said only 17 out of more than one hundred resorts had paid resort lease extension fees upfront during former President Mohamed Nasheed’s administration.

Nazeer pointed out that the Civil Court had said the government could not ask for resort lease extensions upfront during Nasheed’s tenure.

Further, resort owners had amended their agreements to pay lease extension in installments during President Dr Mohamed Waheed Hassan’s administration, and as such it would be difficult to amend legislation, Nazeer said.

Then Governor of Maldives Monetary Authority (MMA) Fazeel Najeeb at the time opposed many of those measures, arguing that asking resort owners to pay lease extension fees upfront was robbing the state of future revenue for a “temporary benefit.”

Opposition Maldivian Democratic Party (MDP) MPs said changing agreements could reduce investor agreement in the country.

MDP has described the government’s revenue raising measures as excessive.

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6 Comments on "PPM MPs support abolishing tourism bed tax"

  1. Ekaloas buddy on Thu, 30th Jan 2014 12:03 AM 

    Why…. WHY would you give up bed tax? Does the government have enough money now? Tourists probably don’t even know they’re paying that. Considering what they pay all together, it’s peanuts. It’s no burden on resorts, cause they just pass the tax on to their customers.

    It makes no sense AT ALL.

  2. Nadaal on Thu, 30th Jan 2014 10:16 AM 

    Ekaloas, Very funny the way you think. Look at Colombo, they increased prices hoping the same way you hoped that tourists would not even feel it but now they are struggling to fill the beds. m
    It is the profligacy of the State that has to be addressed instead of turning to taxes and squeezing the pockets of the ordinary citizens and killing the bird that lays the golden eggs.
    HEP said he will not appoint many state Ministers and political appointees but now we have almost a century. It is rumored the Customs are now charging duty even on items used by our poor fishing community. I am sure HEP will not permit to charge duty of lines, hooks and poles which are used by our fishermen. HEP should bring decipline to the administration by being strict with the coalition partners instead of becoming a victim who is held for ransom by those ambitious, selfish partners who claim to hold the remote control. Beware Sir.

  3. Larry[geordie]Dodds on Thu, 30th Jan 2014 2:29 PM 

    Maldives are getting too expensive for the ‘ordinary’ tourist..Don’t make it any more expensive because there are plenty more tropical islands that would love your tourists…

  4. Former tourist on Thu, 30th Jan 2014 4:15 PM 

    Just to remember:
    Besides cost for flights, transfers, overweight (scuba equipment), accomodation:

    we already pay 8 US$ bedtax.

    Then take i.e. the 0,4 ltr beer:

    5 US$ + 10% service charge + 8 / 12% T-GST

    25 US$ “Airport departure charge” coming

    For how long do you think this will keep going?
    If you only concentrate on the “upper crust” on high level 5***** resorts I can wish you much luck for the future???

  5. Ekaloas buddy on Thu, 30th Jan 2014 4:41 PM 

    Nadaal, Big difference between a resort holiday in The Maldives and a trip to Colombo. It attracts different people. The average budget needed for a week in The Maldives is at least 5 times higher than a week in Colombo.

    The T-GST raise will be felt much harder and disliked more by tourists than those 8 dollars for a bed. At the end these changes are a waste of money (changes cost money), cause at the end there is just a tax shift which will make it slightly more expensive for tourists to visit The Maldives. And a bed tax is much easier and transparent (so cheap to maintain) than T-GST.

  6. Logal Sumaari kaleyge on Sat, 1st Feb 2014 3:01 AM 

    Government focusing on taxation is just absurd, when it’s clear monetary reform and legal tender nation wide needs reform is needed to see foreign reserves grow.

    If Yameen have guts he would do it, but I guess he doesn’t


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