Tourism Tax, Stimulus Loan, Cheque Ceiling

Thursday, November 24

Kaani Hotels signed an agreement with the Alif Alif Ukulhas council to build a 250-bed city hotel on the island. The bid winner was leased a large beachfront property with a reported MVR1.1 million (US$71,300) acquisition fee and MVR160,000 monthly rent.

Kaani operates several properties in Maafushi, including the island’s largest hotel.

Thursday, November 24

The Housing Development Corporation decided to permit shops, restaurants and other businesses to be operated in the first floor of privately-owned buildings in Hulhumalé.

Commercial use was previously restricted to the ground floor. Industrial use with garages and warehouses remains prohibited.

As part of its Covid-19 economic recovery package, the finance ministry reopened ‘Economic Stimulus Loans’ for small and medium-sized businesses, offering up to MVR7 million (US$454,000) at a 6% interest rate and four-year repayment period.

To be eligible, businesses should not have been a recipient of a previous relief loan.

Wednesday, November 23

Associations representing resort workers and travel agents were at odds over the impact of sales tax hikes due to take effect on 1 January 2023.

The Maldives Association of Travel Agents and Tour Operators (MATATO) strongly opposed the “abrupt” rise in the tourism sector goods and services tax (T-GST) from 12% to 16%, accusing the government of economic mismanagement and warning of a US$50 million loss to the industry along with an MVR2,000 (US$130) reduction in the service charge paid to workers.

But the Tourism Employees Association of Maldives (TEAM) disputed claims of booking cancellations. While income losses were unlikely as tourist arrivals were unaffected by previous tax hikes, TEAM suggested that more notice would have been better, echoing appeals by the resort operator’s group for a one-year delay.

TEAM called for progressively higher business profit and income taxes in order to improve public services and wages.

The president ratified the tax bill on Tuesday. The amendment approved by parliament last week “seeks to increase state revenue, following fiscal strategy forecasts that indicate the requirement for measures to accommodate recurring expenditures amidst volatile changes to the global economy,” according to the president’s office.

T-GST covers all goods and services provided by the tourism sector, including resort supplies, travel agency services, and domestic air transport for tourists. The general goods and services tax – which covers the domestic sector – will also increase from 6% to 8% next year.

Wednesday, November 23

The health ministry contracted Gulf Craft Maldives to procure 13 speedboats “to transfer laboratory samples, conduct outreach program and in case of emergency to transfer patients.”

The Bank of Maldives announced a value ceiling for cheques with effect on 1 April 2023, after which it will only process cheques up to MVR50,000 and US$3,000. The cap applies to cheques issued by individuals, businesses and corporations.

“We encourage our customers to bank using our digital channels for everyday banking,” BML said. “Internet and Mobile Banking are secure, convenient and easy-to-use services giving customers access to banking 24 hours a day, anywhere in the world.”

The change was part of the central bank’s strategy to promote digital transactions or electronic payments.

A fee will also be introduced in 2023 and the clearance period will be increased to 10 days.

The number of cheques processed by banks has fallen 60% over the past five years from 1.86 million in 2017 to about 700,000 last year.

The infrastructure ministry signed a financing agreement with Muni Enterprises for the development of a new domestic airport.

The government plans to award airport projects under a cross-subsidisation policy with islands, land or lagoons allocated for tourism development. The bid announcement was made for the third time in August following revisions to cross-subsidy regulations. The minimum financing amount was reduced from US$5 million in the first announcement to US$3 million.

Muni was among a dozen companies that submitted contractor financing proposals. A financing agreement was also signed last month with resort operator Dhekuni Dhuni.

New airports are to be developed on Haa Dhaal Makunudhoo, Shaviyani Bilehfahi, Baa Thulhaadhoo, Thaa Vilufushi, Faafu Magoodhoo and a location to be decided upon in south Raa Atoll.

Monday, November 21

The Raajje Transport Link’s high-speed ferry network expanded to Lhaviyani Atoll. The service is offered free of charge during a trial period to familiarise the public with three routes within the northern atoll.

The three northernmost atolls were covered in the first phase of the MVR800 million (US$51.8 million) project to establish a nationwide ferry network with purpose-built speedboats.

flagship policy of the current administration, the ‘Integrated National Public Ferry Network’ groups atolls into six zones with routes designed for a commuter link to connect nearby islands, a non-commuter link for longer trips to domestic airports and business hubs, and a highway link to connect regional hubs.

According to RTL, “each vessel has 48 reclinable airline style seats, designated seating for wheelchair passengers, and securable mechanism for medical stretchers”. Customers can book and pay for tickets on the RTL website or app. 

Monday, November 21

Sunday, November 20

The fisheries ministry invited applications under a loan scheme to install seawater refrigeration systems on fishing vessels. Up to MVR34 million will be disbursed to set up freezing capacity in at least 68 boats, according to the ministry,

The loans are part of an Islamic Development Bank-funded project to upscale up to 200 fishing vessels in the Maldives, which also offers support “to adapt renewable energy solutions through the installation of solar PV plants and to find new and more lucrative market opportunities through the enhancement of market linkages.”

Sunday, November 20

Saturday, November 19

The inaugural Chef Awards honoured top local chefs and culinary professionals. Organised by the  Chefs Guild of Maldives, 36 chefs were recognised in eight categories: Executive Chef, Sous Chef, Competition Chef (recipients of medals and awards at local and international level), Education Chef (those who are instrumental in developing and fostering talent), Pastry and Bakery Chef, Young Chef, Chef of the Year and Long Service Special Awards.

Saturday, November 19