Parliament approves hiking airport service charge to US$25

Parliament today approved legislation to raise the airport service charge from departing foreign passengers to US$25 from July onward as part of the current administration’s revenue raising measures.

The amendment bill submitted on behalf of the government by Progressive Party of Maldives MP Abdul Azeez Jamal Abubakur was passed with 32 votes in favour.

The government anticipates over MVR100 million (US$6.4 million) in additional revenue from the increased departure tax.

Parliament has also approved other revenue raising measures proposed by the government, including hiking import duties, reintroducing the bed tax until the end of November, raising the Tourism Goods and Services Tax (T-GST), and introducing GST for telecommunications services from May 1.

A proposal by the administration of former President Mohamed Waheed to raise the service charge to US$30 was narrowly defeated in April 2013.

The 1978 law imposing the airport service charge on departing passengers was first amended under the Maldivian Democratic Party government and raised to US$18.5 for foreigners.

The imposition of a similar Airport Development Charge (ADC) of US$25 by Indian infrastructure group GMR was previously a major point of contention for the Waheed administration, which terminated the concession agreement with the GMR-led consortium to modernise the airport in December 2012.

Other bills

A raft of other bills were also passed at today’s sitting of the People’s Majlis, including a bill on the state wage policy that was vetoed by former President Waheed in December 2012.

The legislation proposes the creation of a five-member National Pay Commission chaired by the finance minister with part-time members to determine salaries and allowances for the public sector and authorise pay rises.

The bill stipulates that the commission must consider the cost of living, inflation and the consumer price index in determining wages.

Moreover, salaries should incentivise government employees to work in islands with small populations.

The commission would also formulate standards and rules for determining the state’s pay scale or appropriate salaries based on qualifications and nature of employment.

Legislation on sole proprietors and business registration submitted by the administration of former President Nasheed in 2011 as part of an economic reform package was also passed today.

According to the draft legislation on business registration, the bill seeks to ensure that businesses, partnerships and cooperative societies operating in the Maldives are properly registered; specify what kind of businesses must be registered along with procedures for registration; and oblige businesses to submit information to the Registrar of Businesses.

The bill was also vetoed by President Waheed in April 2012 citing “socio-economic” concerns.

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