The Maldives welcomed the one millionth tourist of the year. Daniela Kilnarova from the Czech Republic was greeted with a ceremonial welcome and accorded the Antara Tier of the Maldives Border Miles programme.
The government’s target for 2022 is 1.6 million tourists. With arrivals in July surpassing pre-pandemic levels and the peak season due to begin in December, the Maldives is on course to achieve the target.
MVR2.3 million (US$149,150) was the highest acquisition cost proposed for the development and operation of an overwater restaurant in Hulhumalé phase two.
A US$136 million contract to develop the Hanimaadhoo airport in the northernmost atoll was awarded to JMC Projects, an Indian company that submitted the winning bid.
The project – financed by a line of credit from the Indian EXIM Bank – involves the construction of a new 2.46km runway and a terminal with the capacity to serve 1.3 million passengers annually. Once the expansion is completed in 2024, the international airport would be able to accommodate A320 and Boeing 737 aircraft, which would enable direct flights from the Middle East, South Asia, Southeast Asia and southern African countries, the economic development ministry said. The project will clear obstacles in developing tourism in the northern atolls, create “thousands of jobs” and facilitate fish exports, it added.
The tax authority collected MVR2.65 billion (US$171.8 million) as revenue in July, up 311.8% compared to the same month last year as the deadlines for income tax, goods and services tax, and green tax payments fell during the month. Seven resort operators also paid a combined US$35 million as lease period extension fees.
“This fee was not received in July 2021,” the Maldives Inland Revenue Authority explained. “Additionally, tourist arrivals of June 2022 increased by 97.4% compared to June 2021, which led to a favourable outcome for T-GST, airport taxes and fees and green tax.”
The Maldives Ports Limited announced the restoration of an MVR10 (US$0.64) per meter charge for docking island ferries at the Malé southwest harbour with effect on September 1. The docking fee was reduced to MVR1 per meter per hour as part of Covid-19 relief for vessels transporting cargo from the capital to other islands.
Western Union ceased money transfer services in the Maldives after the central bank suspended the license of its local agent Island Financial Services, a subsidiary of the Villa Group.
Operations have been halted “until the necessary internal updates have been implemented,” according to Western Union.
“This means, for regulatory reasons outside of our control, and until further notice, Western Union money transfer services will be temporarily unavailable.
We recognise the inconvenience caused by this service disruption. We continue to stay in close communication with Island Financials and remain committed to keeping you informed of any updates.”
The World Bank welcomed the government’s plans to raise the goods and service tax next year and recommended further revenue-raising measures in order to sustainably finance the country’s development needs.
Echoing advice by the International Monetary Fund, a Public Expenditure Review by the World Bank suggested that the Maldives has a “small window of opportunity” to avoid a looming debt crisis. It estimated that raising both the General and Tourism GST rates could yield 2 to 3% of GDP in revenue.
It also recommended other short-term options to raise an additional 2.7% of GDP in revenue: “(i) reducing the Personal Income Tax threshold, which is currently too high to be a meaningful source of income; (ii) introducing a presumptive tax regime at a rate of 2-3 percent of turnover for businesses below the GST threshold; (iii) rationalise Goods and Services tax exemptions and zero-ratings; (iv) abstain from introducing new tax incentives; and (v) extend GST to digital services and offshore booking accounts.”
In addition to better management of public debt, policies recommended for reining in unsustainable government spending include “enacting the proposed reform on maximum retail prices for drugs reimbursed by the Aasandha health insurance scheme, better targeting of public housing support to the neediest groups, setting a wage bill target as a share of government revenues, strengthening incentives to contribute to the pensions scheme, and eliminating ‘double pensions’ for select groups of civil servants.”
The finance ministry reopened a tender to procure 40MWh of battery energy storage systems (BESS) in a World Bank-funded renewable energy project.
The Accelerating Renewable Energy Integration and Sustainable Energy (ARISE) Project the deployment of 30MW of solar PV across the country. The storage systems are to be set up on several islands to enable effective use of solar energy.
