Parliament’s Economic Affairs Committee has this week begun a review of the Business Registration Bill returned to the People’s Majlis by President Dr Mohamed Waheed Hassan, after it was originally approved in April.
The President’s Office told Minivan News that the bill, initially proposed under the previous government, had been returned over fears about the impacts it could have on the country’s economy at the present time.
Official government figures indicated that inflation had risen to an annual rate of 16.53 percent in April. Earlier in the year, the Finance Committee estimated that the current budget deficit would reach 27 percent of GDP, or Rf9.1 billion (US$590 million).
The government meanwhile announced this week that it had already been issued with a Rf300million (US$19.5 million) government loan from the Bank of Maldives (BML), despite questions being raised over whether the deal needed Majlis approval.
The government had previously asked for parliamentary approval for the budget support loan in place of an existing $65 million (Rf1 billion) loan that had been approved for the 2012 budget. The President’s Office claimed the funding, devised as part of a “mop up” operation, would help “reduce the circular flow of rufiya in the economy” adding it would not exacerbate the current national spending shortfall.
While unfamiliar with the latest amendments being proposed to the Business Registration Bill, a former Economic Development Minister who served under the previous government claimed the legislation had originally been devised in an attempt to simplify the registration of foreign investors.
However, President’s Office Spokesperson Abbas Adil Riza said that the bill was deemed by the present government to represent the implementation of a new tax regime in the country – a decision he suggested was unreasonable considering the current economic climate.
“At a time where as I’m sure you are aware, the economy is beginning to improve, the president and the cabinet has agreed that the time is simply not right to introduce new taxes,” he said.
According to local newspaper Haveeru, President Waheed’s concerns regarding the bill were said to include “Article 3 (e)”, which relates to services provided for islands beyond the capital of Male’. The report said that the nature of these services was believed to be unclear in the original drafting of the bill.
The president was also reported to have raised an issue with a perceived failure in the bill to specify a “process” required for the registration of a foreign branch of a company in the Maldives. The government therefore requested the removal of “Article 5 (b)” as well as a number of amendments relating to the registration of a branch of a foreign company in the Maldives, raising concern over a lack of specifics related to the use of the term “foreigners”.
When questioned by Minivan News, Abbas did not specify the exact nature of the potential “legal and socio-economic ramifications” that had concerned the government about the Business Registration Bill.
The bill was one of three pieces of legislation related to economic reform returned to parliament for revision last month on the basis of issues raised by Attorney General Azima Shukoor.
The exact nature of these concerns was not detailed by the President’s Office at the time, while the attorney general was also not responding to calls today about the nature of the government’s decision to return the bill.
Finance Minister Abdulla Jihad meanwhile forwarded Minivan News to the Ministry of Economic Development concerning an enquiry on the Business Registration Bill. Economic Development Minister Ahmed Mohamed was not responding to calls.
Reform package
Although unfamiliar with the latest proposals for amendments to the Business Registration Bill, Mahmoud Razee, Economic Development Minister under the previous government, said the legislation was original proposed as part of a wider economic reform package championed by Nasheed’s administration.
The reforms, introduced under the previous government, were further revised following consultations with the International Monetary Fund (IMF) over how to strengthen and stabilise the economy.
These policies included introducing a general Goods and Services Tax (GST); raising import duties on pork, tobacco, alcohol and plastic products; raising the Tourism Goods and Services Tax (T-GST) to 6 percent; and reducing import duties on certain products.
Razee stressed that registration bill was intended specifically to provide a “clearer means” for facilitating foreign investment within the Maldives’ business sector.
“We were trying to make it easier to register foreign shareholders here,” he said.
Taking the retail sector as an example, Razee said that the retail sector was quite “restrictive” in terms of encouraging foreign investment.
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We are bankrupt now!
Raazee's bill allow the foreign company to come and register in Maldives and do trading in local fish market and local fruit market as any other Maldivian.
Dictator Anni objetive was to create an unfair competition to small companies and then eradicate them and then to allow Indian to take over our economy.
Razee has no clue of economics and he is a college drop out from flying school . How did he became economist without any qualification ?
Nasheed himself is a failure in business and he could not run his own company " Dhivehi Meysthiri" .
Anni is a good dreamer .
@mode
You are a puppet on a string.
You will not care even if the country goes bankrupt or not because you are one of them I believe.
All you mean to say here is that only the CHAMPAs, the BURUMAs and the JANGIYAs were supposed to take hold of the four corners of this state and stone wash it.
Anni can be anything, but I can see he was doing a better job at attending to the needs of citizens who people like you have been stone washing for 30 years.
You will detest everything that do not come you way.
Understandable!
Anni proposed that electricity price will not be raised, price of water will not be raised and inflation will not go high.
Opposite of all these happened and within short period of time of him in president post, he increased those and inflation had 5 decades high in one year.
The dictator argument of increasing those prices were to get rich pay higher and poor pay lesser. But the idiot does not know that rich will pay higher and then the riches will get this money charged to normal poor people through the goods that the poor need to buy from rich. This is how "corner shop" were eradicated . Because those small shops could not afford to pay those electricity bills and exorbitant rents and then finally those richest people started to crepe into this small business and finally invaded the middle class business too.
Aussi, people like you will never see the negative ripple effect on the whole economy due to this kind of " immediate fix" policy .
Dictator should have known that raising price of basic needs are the way to improve the economy but rather will be damaging.
However, GST is something that the Dictator did right and i salute the guy for his courage to introduce that on his terms. But having too much in short term may not be the best but it is good and then get the different tax regime introduce over a period and let the investor see those taxes coming rather than taking them all in surprise.
But sad part of his tax policy is that he reduce the Resort rents to please his fellow businessmen. Infect he should not have reduced any Resort rent and then the government revenue would have been 30% higher than what they are getting now.
But with this increase in revenue and he should have been able to rule this country for years to come but he himself got lost and his expenditure was gone rocket high.
Oi Mode, Why are you squandering your precious time on here writing these ? Im sorry but it does not make sense 😛 !