The High Court overturned a civil court order for Sun Travel to pay US$28 million owed as damages to Hilton, the latest judgment in a long-running saga after the Singapore International Arbitration Centre ruled in favour of Hilton over Sun’s cancellation of a management agreement for Irufushi resort in April 2013.
After the local resort operator appealed the Maldives civil court’s order to settle the dues within a month, the High Court ruled that local courts must make a determination on accepting the arbitration award before it could be enforced. But Judge Mohamed Niyaz, who dissented from the majority opinion by the three-judge panel, noted that the High Court had previously upheld the arbitration ruling.
In March, the civil court froze Sun’s accounts and imposed a travel ban on its owner Ahmed Siyam Mohamed, MP for Dhaalu Meedhoo and leader of the Maldives Development Alliance.
The tax authority collected MVR2.32 billion (US$150 million) as revenue in June, up 95% from the same period last year. Bank and corporate income tax receipts were higher as deadlines that fell in June 2021 had been extended to July 2021 due to Eid holidays. Tourism-related tax receipts were also higher this year with record-breaking arrivals in May.
A joint venture of local construction company Dhonbez was enlisted to design and build 400 housing units in Haa Dhaal Kulhudhuffushi. The MVR439.9 million (US$28.5 million) project is to be completed in 540 days.
The finance minister announced plans to raise the goods and services tax next year. Subject to parliamentary approval, GST for the domestic sector will rise from 6% to 8% and T-GST – which covers all goods and services provided by the tourism sector – will rise from from 12% to 16% in 2023.
The tax hikes are part of “corrective measures” to improve the country’s fiscal outlook due to challenges posed by unforeseen global conditions, Finance Minister Ibrahim Ameer told the press.
Elevated oil, commodity and food prices as a result of Russia’s invasion of Ukraine coupled with persistent supply chain constraints have pushed up government spending beyond budgeted levels, he explained. Subsiding fuel has cost MVR910 million (US$59 million) so far this year, up from a total of MVR546 million in 2021.
The government will not be able to finance a large fiscal deficit in 2023 without cost-cutting and revenue raising measures, Ameer said, citing an unaffordable cost of borrowing in the international finance market with higher interest rates.
The tax rises will contribute to inflation, the finance minister conceded. But both the World Bank and International Monetary Fund have recommended GST hikes as the Maldives has one of the lowest rates among small island developing states, he noted.
Driven by the strong rebound in tourism, the Maldives economy is expected to recover to pre-pandemic levels by the end of the year with GDP growth projected between 13% to 16% for 2022, Ameer said.
The Maldives Airports Company Ltd controlled the sale of jet fuel due to high demand after neighbouring Sri Lanka’s airports stopped refuelling aircraft.
The Velana International Airport is struggling to cater to airlines as the daily sales volume has risen from 10,000 litres to 40,000 litres, MACL deputy managing director Ibrahim Thoha told the press. Most flights on return trips to Colombo are refuelling in the Maldives, he said.
But MACL assured that there will be no disruptions to flight operations. All flights will be able to refuel for departure but a limit has been imposed as some airlines have been buying large volumes, managing director Mahjoob Shujau said.
The shortage will be resolved after the arrival of new fuel shipments, he added.
Hussain Amru, managing director of the State Trading Organisation, which supplies jet fuel to MACL, assured constant supply. A buffer stock ensures that delays do not cause disruptions, he said.
The State Electricity Company invited employees to buy unsold apartments from two towers built in Hulhumalé phase two under its staff housing project. According to STELCO, 16 one-room apartments and 16 two-room apartments (with small maid room) are available for eligible staff. A downpayment of MVR350,000 (US$22,700) must be paid before December. After electrification work, STELCO expects staff to start moving in this month. The two towers comprise of 360 flats.
Grant agreements worth US$34 million were signed with the World Bank “to strengthen pension and safety nets for Maldivian workers and improve their employability, and to leverage digital technologies for development and climate resilience.”
According to the World Bank, the US$24 million Sustainable and Integrated Labor Services (SAILS) project “will help the government establish an unemployment insurance scheme and an employment services scheme. Employers and employees will contribute jointly to a fund that will pay unemployment benefits.”
The US$10 million Digital Maldives for Adaptation, Decentralisation and Diversification project “will help the government promote competition in the broadband market through regulation and modernise the national identification systems to facilitate online services and transactions” and “improve climate-related data and analytics by tracking emissions, deploying modern technologies such as drones, and using existing data more efficiently for policymaking.”
The president ratified amendments approved by parliament to the tourism law that grants the authority for local councils “to determine the market value of land under their administrative jurisdiction in the most profitable way when being leased for tourism development.”
New provisions were also added “to determine the market value of shares of tourist facilities leased under joint ventures to ensure the interests of all stakeholders in the event of a buyback or sale of shares,” according to the president’s office.
The Environment Protection Agency fined Alimatha resort MVR312,000 (US$20,233) for dumping food waste into the sea.
A 15-year-old regulation that permitted resorts to dump organic waste was recently amended to outlaw the practice. The old rules required resorts to ensure that currents carry dumped food waste away from islands. But resort waste routinely washes up on the shores of nearby islands.
The central bank unveiled a new currency symbol for the Maldivian Rufiyaa. The design by Hassan Shujau was chosen through a competitive process open to the public.
