Business & Tourism – Page 11 – Minivan News

Government proposes import duty hike for oil, staple foodstuffs

The government has proposed raising import duties for staple foodstuffs and oil to 10 percent to raise additional revenue anticipated in the record MVR24.3 billion (US$1.5 billion) state budget for 2015.

Amendments (Dhivehi) submitted to the Export-Import Act on behalf of the government by Maldives Development Alliance MP Mohamed Ismail proposes raising import duties from the current zero rate to 10 percent for rice, flour, wheat, and sugar as well as oil or petroleum products.

Additionally, the bill proposes raising custom duties for tobacco from 150 to 200 percent and raising the duty for a single cigarette to MVR1.25.

The government has also proposed imposing a 20 percent custom duty for luxury cosmetics and perfume and a 200 percent custom duty for land vehicles such as cars, jeeps, and vans.

However, the bill proposes scrapping import duty for luxury yachts imported for tourism businesses.

The stated purpose of the amendment is revising import duty rates in light of “price changes in the global market”.

The latest monthly economic review from the Maldives Monetary Authority noted that “the International Monetary Fund (IMF) commodity price index fell in both monthly and annual terms in September 2014, by 4 percent and 9 percent, respectively.”

“The monthly and annual decline in commodity prices was attributed to the decline in petroleum, metal and food prices. The price of crude oil fell by 4 percent in monthly terms and by 12 percent in annual terms and stood at US$95.9 per barrel at the end of September 2014,” the review stated.

About 30 percent of the Maldives’ GDP is spent on importing fossil fuels. In 2012, US$ 486 million was spent on oil imports, and the figure is estimated to rise to US$700 million by 2020.

According to the Maldives Customs Service, of the MVR7.2 billion (US$466.9 million) worth of goods imported in the first quarter of 2014, one-third was spent on petroleum products.

Finance Minister Abdulla Jihad meanwhile told parliament’s budget review committee last week that the government was considering increasing custom duties “mostly for luxury items, or items that are harmful to the environment or health.”

Jihad had said the items under consideration were tobacco, perfume, and vehicles.

Other revenue raising measures

In his budget speech to parliament, Jihad also revealed plans to revise the electricity subsidy, which he said currently benefits the affluent more than the needy.

Targeting the electricity subsidy to low-income families or households would save 40 percent of the government’s expenditure on the subsidy, Jihad explained.

Jihad told the budget review committee that the government anticipates MVR533 million (US$34.5 million) in additional revenue from revising import duties, which was among five revenue raising measures proposed with next year’s budget.

The forecast for additional revenue from the new measures is MVR3.4 billion (US$220 million), including US$100 million expected as acquisition fees for investments in special economic zones and MVR400 million (US$25.9 million) from the sale and lease of state-owned land.

The other measures were introducing a green tax of US$6 per night in November 2015 and leasing 10 islands for new resort development.

An amendment (Dhivehi) to the Tourism Act has been submitted by Progressive Party of Maldives MP Abdulla Khaleel on behalf of the government for introducing the green tax.

The government has also decided to waive import duties for construction material and capital goods imported for resort development and provide sovereign guarantees for loans.

Meanwhile, at the ongoing budget debate, opposition Maldivian Democratic Party MPs have criticised plans to hike import duties while providing concessions to wealthy resort owners.

The burden of higher prices due to higher tariffs would be borne by the public, the MPs argued, contending that the government’s economic policies would benefit the rich at the expense of the poor.

“Our question is why shouldn’t an income tax be introduced? When MDP submitted an income tax bill to parliament it wasn’t passed. But we are telling this government to introduce an income tax and [tax] the affluent as well,” said MDP MP Eva Abdulla last week.

US$6 green tax to be introduced from November 2015, says tourism minister

Government submits revenue raising bills to parliament

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Government submits revenue raising bills to parliament

The government has submitted two bills to parliament for introducing a green tax and revising import duties to raise additional revenue anticipated in the 2015 state budget.

The President’s Office explained in a press statement on Thursday (November 13) that the government submitted amendments to the Tourism Act to introduce a US$6 per day ‘green tax’ on tourist establishments with the exception of guesthouses.

“The government decided to introduce this tax, as the Maldives is a tourist destination and the lack of a safe waste management system is adversely affecting tourism industry, to pave the way for the establishment of an adequate environment-friendly waste management system, to make Maldivian tourism an environment-friendly industry, and to provide an environment-friendly service to tourists,” the statement read.

The amendment also specifies the powers of the Maldives Inland Revenue Authority to collect the green tax, the statement added.

Tourism Minister Ahmed Adeeb told the press last week that the green tax would be levied in November 2015 – 11 months after the abolition of the bed-tax, which will continue to be charged at US$8 a night until the end of this month.

Adeeb insisted that the green tax would not hinder the demand from tourists – especially from Europe – who would become “champions” of the Maldivian environment by paying the tax.

While some resort owners have suggested that the combination of the bed tax with the rise in Tourism Goods and Services Tax (T-GST) to 12 percent this month has affected bookings, Adeeb vowed there would be no further hikes in T-GST during the current administration’s five-year term.

Opposition MPs have meanwhile sought assurances from the government that proceeds from the green tax would be used to finance environmentally sustainable infrastructure projects such as sewerage and coastal protection in the islands and not for the state’s wage bill.

In his budget speech to parliament earlier this month, Finance Minister Abdulla Jihad noted that MVR3.4 billion (US$220million) was forecast from new revenue raising measures, which also includes acquisition fees from investments to special economic zones (SEZs), income from the home ownership programme, and leasing 10 islands for resort development.

Import duties

The government also submitted amendments to the Export-Import Act to revise customs duties or tariffs to reflect “changes in the price of import goods in the global market,” the President’s Office stated.

In April, parliament approved import duty hikes for a range of goods proposed by the government as a revenue raising measure.

Jihad meanwhile told the budget committee last week that the government was considering increasing custom duties “mostly for luxury items, or items that are harmful to the environment or health.”

The cabinet’s economic council has not yet finalised the import duty or tariff revisions, Jihad noted, though he did reveal that the items under consideration include tobacco, perfume, and vehicles.

Tariffs for tobacco would be raised from the current 150 percent to 300 percent, 100 to 150 percent for cars, and zero to 10 percent for perfume, Jihad said.

Asked if higher custom duties would lead to higher prices, Jihad said the impact on the inflation rate would have to be studied for a proper assessment, which would take time to complete.

At parliament’s budget debate last week, Maldivian Democratic Party (MDP) MP Eva Abdulla criticised the proposed import duty hikes, noting that the government has decided to waive tariffs for construction material or capital goods for new resorts with development stalled due to financial constraints.

The burden of higher prices of goods due to higher custom duties would be borne by the public, she argued.

Eva noted that Jihad told the budget committee of plans to increase import duty for foodstuff and petroleum products.

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MDP says 2015 state budget neglects transportation

The Maldivian Democratic Party (MDP) transportation committee has said that the proposed 2015 state budget does not give adequate importance to transportation.

While speaking at an MDP press conference today, the Committee’s Chair Dr Ahmed Shamheed said that the government has failed in fulfilling its manifesto which states that providing cheap, effective, and speedy transportation as one its aims.

“Even though the government recently announced that it has achieved 90 percent of the goals outlined in its manifesto, not even 1 percent of the transportation related goals have been achieved,” said Shamheed.

Shamheed noted that the Progressive Party of Maldives (PPM) in its manifesto outlined that it would finish up the ongoing regional airport development projects. However, He said that no regional airports have been opened in the last year.

President Abdulla Yameen recently revealed plans of developing an airport in the north at Haa Dhaalu Kulhudhuhfushi in the upcoming year.

The government has secured a preliminary agreement for the development of Ibrahim Nasir International Airport, with the cabinet revealing recently that the Beijing Urban Group and Maldives Airports Corporation Limited had finished the drawings of the airport and were in the process of submitting the proposal to China’s Exim bank in order to finance the project.

Plans for the ambitious Malé-Hulhulé bridge project were also said to edging closer to realisation as a Chinese team visited the Maldives to conduct a preliminary survey this month.

While the record MVR24.3 billion (US$1.5 billion) proposed budget for the upcoming year allotted MVR63 million (US$5 million) for regional airports under the tourism ministry, it is unclear whether the amount is for recurrent or capital expenditure.

Also speaking at the press conference, MDP transport committee member Ahmed Zahir said that the atoll ferry system introduced during MDP’s government is currently in turmoil as the government does not prioritise development of the ferry system.

“The transportation systems in the atolls are being destroying and I am afraid that it might go back to the old days where the inter-atoll transportation was monopolised by individuals with boats,” said Zahir.

The MDP committee also slammed the government for budgeting expected revenues from increasing the import duty on vehicles and fuels, stating that the measures would have a significant impact on the guest house industry as travelling costs within the country would increase severely.

Previously, MDP’s education and training committee claimed that the funds allocated for education in the budget were poorly prioritised and would lead to corruption.

Additionally, the MDP budget review committee stated that the budget is ‘aimless’ and serves only administrative purposes, suggesting that programme budgets submitted during the MDP government were part of a strategic action plan aimed at fulfilling the party’s promises.

President Abdulla Yameen dissolved the Ministry of Transport and Communication in July, transferring regional airports to the Ministry of Tourism and the Transport Authority to the Ministry of Economic Development.

The move came shortly after the dismissal of Transport Minister Ameen Ibrahim following break down of the election-winning coalition of the Jumhooree Party – of which Ameen is a member – and the PPM.

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State budget for 2015 will be balanced, insists President Yameen

The record MVR24.3 billion (US$1.5 billion) state budget for 2015 submitted for parliamentary approval last week is a balanced budget, President Abdulla Yameen insisted yesterday in his Republic Day speech.

Referring to the Progressive Party of Maldives’ (PPM) campaign pledge to balance the budget in two to three years, President Yameen said the 2015 budget has a “primary balance surplus.”

“Looking at the figures of the budget, that is not a deficit we cannot plug. The deficit is a small figure,” he said.

The projected fiscal deficit in 2015 is MVR1.3 billion (US$84 million) or 2.5 percent of GDP.

The deficit was not for the state’s expenditure in 2015, Yameen continued, but for arrears or unpaid bills from recent years.

“So in my book, the 2015 budget is a balanced budget,” he said.

In his budget speech to parliament last week, Finance Minister Abdulla Jihad revealed that the forecast for recurrent expenditure in 2015 is MVR15.8 billion (US$1 billion) while the forecast for government income or revenue is MVR21.5 billion (US$1.3 billion).

The projected revenue includes MVR3.4 billion (US$220 million) anticipated from proposed new revenue raising measures.

A balanced budget would allow the government to “consolidate the economy,” maintain the value of the rufiyaa, and repay foreign and domestic debt, Yameen said.

After balancing the budget, Yameen said the government should work toward achieving a surplus.

The public expected waste management systems, water and sewerage, harbours, and land reclamation, he continued, noting that the MVR6.3 billion (US$408 million) Public Sector Investment Programme (PSIP) in the 2015 budget – 24 percent of the budget – was unprecedented and double that of 2014.

Yameen observed that the PSIP budget was around MVR3 billion (US$194 million) in the past.

While carrying out infrastructure projects in all 188 inhabited islands in one year would not be possible, Yameen said the budget was formulated after prioritising developmental projects.

Moreover, the government would seek foreign aid, soft loans, and concessional loan assistance to finance infrastructure projects, he added.

The budget also includes welfare or social security benefits for the needy, the elderly, and persons with special needs, he noted.

The MVR5,000 (US$324) a month allowance or old age pension would be provided in 2015 as well, Yameen said, while subsidies for food and electricity would be targeted to the needy.

Achievements

On the government’s achievements during its first year in office, Yameen said the economy was improving as a result of the government’s policies.

The acute dollar shortage of recent years has been alleviated, he added, while the ‘unlimited’ Aasandha insurance scheme was introduced to assist persons with chronic illnesses.

While there were only nine pharmacies in the atolls last year, the State Trading Organisation has opened 71 pharmacies in various islands this year.

Moreover, sea ambulance service was provided to six atolls, he continued, and a 50-bed multi-speciality hospital would be built in Hulhumalé within three years.

Efforts were underway to install generators across the country to ensure reliable round the clock electricity in all inhabited islands, he said.

The Special Economic Zone Act would meanwhile facilitate attracting foreign investment, Yameen said.

The government has also decided to provide sovereign guarantee for loans to develop new resorts, he continued, while the guest house island policy would benefit small and medium sized enterprises.

The government’s plan to create 94,000 new jobs as pledged during last year’s presidential campaign was through economic diversification or development and not through the civil service, he noted.

On the pledge to develop a ‘youth city’ in Hulhumalé, President Yameen said the second phase of the island’s development through further land reclamation would begin during November.

Work has also begun on introducing an insurance scheme and providing subsidies to fishermen and farmers, he added.

The implementation of the new national education curriculum in 2015 would meanwhile bring “revolutionary changes” to the education sector, Yameen said.

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MPs quiz finance minister about revenue raising measures

MPs on the budget review committee quizzed Finance Minister Abdulla Jihad yesterday about revenue raising measures proposed within the record MVR24.3 billion (US$1.5 billion) state budget for 2015.

Briefing the committee yesterday (November 10), Jihad explained that MVR3.4 billion (US$220 million) in additional revenue is anticipated from raising import duty rates from July onward and introducing a ‘green tax’ for tourists.

Additionally, acquisition fees from investments to special economic zones (SEZs), income from the home ownership programme, and leasing 10 islands for resort development would help raise the forecast revenue.

The minister also told the committee that domestic debt had reached about MVR20 billion (US$1.2 billion)- 39 percent of GDP -making the rolling over of T-bills “a nightmare”.

The government was considering increasing custom duties “mostly for luxury items, or items that are harmful to the environment or health,” he said.

Tariffs for tobacco would be raised from the current 150 percent to 300 percent while duty would be raised from 100 to 150 percent for cars, and zero to 10 percent for perfume, Jihad said.

Asked if higher custom duties would lead to higher prices, Jihad said the impact on the inflation rate would have to be studied, which would take time to complete.

Jihad stressed that the government has ceased deficit monetisation – borrowing money from the central bank to finance the deficit – in May, as a result of which the inflation rate was reduced to 1.4 percent.

In April, parliament approved import duty hikes for a range of goods proposed by the government as a revenue raising measure.

Meanwhile, the forecast for income from SEZ acquisition fees is US$100 million, Jihad revealed, which is expected by August 2015.

A further MVR400 million (US$25.9 million) is forecast from leasing and sale of land from across the country, Jihad said – in particular, plots from unused reclaimed land in various islands.

The state-owned land designated for leasing or sale falls under three categories, he explained, which were residential, commercial, and industrial.

Moreover, 10 new islands would be leased next year for resort development, he continued, which would generate income for the government in the form of acquisition costs.

As an incentive or relief for new resorts with development stalled due to financial constraints, Jihad said the government would waive import duties for construction material or capital goods next year.

Tourism Minister Ahmed Adeeb revealed yesterday that a green tax of US$6 per night would be introduced in November 2015 and guest houses would be exempt from the tax.

Jihad said the income from the green tax would be used for water, sewerage, and coastal protection projects.

Of the proposed revenue raising measures, import duty revisions and introduction of a green tax would be subject to parliamentary approval, which the finance minister hoped would be granted as the budget was passed.

Legislative compromises to new revenue measures led Jihad to express fears in August that the predicted state deficit for 2014 would more than double in 2014.

State debt

The outstanding stock of treasury bills (T-bills) is currently MVR10 billion (US$648.5 million), said the finance minister.

In his budget speech last week, Jihad observed that the state’s debt would reach MVR31 billion (US$2 billion) or 67 percent of GDP by the end of 2014.

Expenditure on state employees in 2014 would reach MVR15.8 billion (US$1 billion), Jihad observed, while MVR3.2 billion (US$207 million) would have been spent on subsidies and social security benefits.

Consequently, the government was facing serious difficulties in “managing the state’s cash flow and financing the budget” as well as securing loans for budget support, Jihad said.

According to the central bank, the total outstanding stock of government securities was MVR13.6 billion (US$881 million) at the end of September.

Spiralling debt is threatening “the economy’s health”, Jihad said yesterday, with the rolling over T-bills proving to be difficult as the ministry has to plead with banks for extension of repayment periods.

“For example, if MVR600 million matures this week and there is MVR700 million in the public bank account, if the MVR600 million is rolled over there’ll be MVR100 million. How can we run the state with that? It can’t be done,” he explained.

The solution was raising additional revenue by utilising resources such as uninhabited islands, he continued, and appealed for cooperation from parliament. Additionally, the government was trying to extend the periods for repayment of debt.

The interest rate for T-bills is currently 7.5 percent, Jihad said, down from 10 percent before the current administration took office.

“This year we estimate that MVR1.2 billion worth of T-bills have been used by the state for finances. In 2015, it will be MVR440 million,” he noted.

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US$6 green tax to be introduced from November 2015, says tourism minister

The new green tax for tourists will be introduced from November 2015 at a rate of US$6 per bed per night, Minister of Tourism Ahmed Adeeb has revealed.

Speaking at a press conference held by the cabinet’s Economic Council today, Abeeb said that guest houses would be exempt from paying the new tax in order to reduce the impact on small and medium businesses.

“Since 2013 the guest house venture has been on the rise. We do not want to hinder the development of these businesses so we have decided to exempt guest houses from paying the tax,” said Adeeb, addressing concerns raised by the opposition Maldivian Democratic Party (MDP) earlier in the day.

The introduction of the new tax is to come 11 months after the abolition of the bed-tax, which will continue to be charged at US$8 a night until the end of this month.

Some resort owners have suggested that the combination of the bed tax with the rise in T-GST to 12 percent this month has affected bookings, though Adeeb today vowed there would be no further increases in T-GST during the government’s current term.

The T-GST rise came after urging from the IMF, which has suggested that the previous rate of 8 percent was low for a tourism industry as profitable as the Maldives’.

Adeeb said today that the council does not believe the green tax will hinder the demand from tourists – especially from Europe – who will become “champions” of the Maldivian environment by paying the tax.

2013 saw a record 1.3 million tourists spend just over 7 million bed nights in the country, although the country’s macro economic stability has remained a concern.

The tourism minister has previously said that revenue generated from the new levy would be spent on resolving the waste management issues in the greater Malé region – an issue made more pressing with the Economic Council’s recent termination of the Tatwa waste management contract.

Adeeb also revealed the council’s plans to remove import duty on construction material needed for the refurbishment of resorts, thereby stimulating resort development which he said would provide numerous employment opportunities for the youth.

President Abdulla Yameen last week announced that five new resorts would begin construction in 2015 in the northern atoll of Haa Dhaalu, which currently has none in operation.

Also speaking at the press conference, Minister at the President’s Office Mohamed Hussain Shareef said the government was seeking to begin the re-development of Ibrahim Nasir International Airport midway through next year.

“Beijing Urban Group and Maldives Airports Corporation Limited has finished the drawings of the airport and are in the process of submitting the proposal to China’s Exim bank in order to finance the project,” explained Shareef.

Shareef also re-iterated the government’s plans to start work on the proposed Malé-Hulhulé bridge in the year 2015, before opening the bridge in 2017.

“The bridge survey team is almost done with the feasibility study and it will be submitting its reports to the Chinese Government who will then finance the bridge through grant-aid and low interest loans,” said Shareef.

Agreements to develop the INIA and to promote the Malé-Hulhulé bridge were signed during Chinese President Xi Jinping’s visit to the Maldives as part of his South-Asian tour in September.

During his visit, President Xi also officially requested that the Maldives participate in China’s 21^st Century Maritime Silk Route, before journeying to India as part of his tour of the region.

Shareef concluded the press conference by commenting on what the governing Progressive Party of Maldives has described as attempts by the opposition to spread misinformation regarding comments made by the foreign minister on Sino-Indian discussions about the silk road project.

After Dunya Maumoon’s comments to the Majlis last week appeared to suggest that Indian had discussed joining the project with President Xi, the Indian government released a statement strongly denying such talks had occurred.

Shareef warned the MDP – which has today announced its intention to table a no-confidence motion against the foreign minister – that it would have to answer to the international community which had been informed of its attempts to sow discord.

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Bill proposed to exempt domestic air travel from T-GST

MPs today debated amendments submitted on behalf of the government by the Maldives Development Alliance (MDA) MP Mohamed Ismail to exempt domestic air travel or ticket prices from Tourism Goods and Services Tax (T-GST).

The amendments (Dhivehi) to the GST Act of 2011 also proposed exempting goods sold at shops in resorts, guesthouses, and hotels that are exclusively for staff from the 12 percent tax rate.

A T-GST hike from eight to 12 percent – approved by parliament in February as part of revenue raising measures proposed by the government – came into effect on November 1.

Subsequently, local airlines Maldivian and Flyme imposed a 12 percent sales tax on ticket prices and increased airfare by about MVR32 per ticket.

“Now a [ticket] to a flight to Addu has gotten more expensive than a flight to Colombo. This is not, in any situation, how it should be priced,” former President Mohamed Nasheed told local media following the tax rise.

Presenting the legislation at today’s sitting of parliament, MP Mohamed Ismail said the purpose of the amendment bill was to exempt Maldivians from the tax hike.

While the bill was submitted on October 22 before the T-GST rise came into force, the MP for Haa Alif Hoarafushi noted that its inclusion in the agenda was slightly delayed.

The bill also states that any visitor who enters the country on a tourist visa shall be considered a tourist.

If the bill is passed into law, the GST rate for domestic airfare would be six percent.

The Maldives Inland Revenue Authority (MIRA) had anticipated MVR34 million (US$) in additional income as a result of the tax hike.

All MPs who spoke during the preliminary debate were in favour of the revision and the T-GST exemption for domestic air travel.

However, opposition Maldivian Democratic Party (MDP) MPs criticised the majority party or ruling coalition for approving the tax hike in February without the exemption for locals.

As the bill would have to be reviewed by committee before it could be passed, MDP MP Ali Nizar said the government had ample time to amend the law before November.

Jumhooree Party MP Faisal Naseem also noted that MPs would have known in February that T-GST would be charged for domestic airfare and goods sold for tourism workers.

“What I want to note today is, would we not have to propose an amendment again for a six percent refund?” the MP for Kaashidhoo asked.

If MPs wished to reimburse locals for the six percent extra charge, Faisal suggested adding a provision in the amendment bill during the committee stage.

He also called on MPs to expedite the legislative process and pass the amendment as soon as possible.

Following the preliminary debate, the bill was accepted unanimously with 60 votes in favour and sent to the whole house committee.

Introduced in 2011, T-GST generated around MVR2 billion (US$129 million) between January and September this year – equal to just under 24 percent of all government revenue.

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Immigration department suspends exit permit regulations indefinitely

The recently introduced exit permit scheme has been suspended indefinitely after complaints about the regulation, which requires foreign workers to obtain permission from their employers before leaving the country.

Immigration Information Officer Hassan Khaleel told Minivan News today that the regulation was suspended after several complaints from different organisations, including numerous airlines and NGOs.

“The exit permit issue has been suspended from today onwards. We will consider and address every single complaint received and look at the regulation from several perspectives before re-implementing,” he explained.

The regulation, which came to effect on October 19, required expatriate workers to present a form signed by their employer at airport immigration before leaving the country.

Speaking at the time, Khaleel explained that the introduction of the exit permit system came after requests from employers concerned at the number of expatriate workers leaving the country without their employer’s permission.

He added that the immigration department believed the new regulations might help lessen the illegal practice of withholding passports – which has been described as ‘rampant’ in the Maldives by the US State Department.

Local NGO Transparency Maldives (TM) expressed concern, however, that the exit permits would exacerbate the well-documented abuses within the immigration system.

Advocacy and communications manager at TM, Aiman Rasheed, said that the regulation might have the same effect of withholding the travel documents of the worker, leading to the “employer having control over the mobility of the worker”.

“While this is an infringement on the freedom of movement for workers, it also presents opportunities for perpetuation of bondage, trafficking, etc, by limiting movement of the worker,” said Aiman.

While exact figures are unavailable, the number of expatriate workers in the Maldives has been estimated to be as high as 200,000 – equivalent to two thirds of the local population.

Long viewed as a country with a poor record on combatting human trafficking, the Maldives was this year removed from the US State Department’s Trafficking in Persons (TIP) watchlist.

Exit permit systems are also operated in other nations with large numbers of expatriate workers – such as the UAE and Qatar, although Qatar announced earlier this year that it was to abolish the practice after pressure from human rights groups.

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Majlis accepts legislation on building code

The People’s Majlis yesterday accepted for consideration a bill submitted on behalf of the government by Progressive Party of Maldives (PPM) MP Saudhulla Hilmy on building codes.

Presenting the 90-page draft legislation (Dhivehi) at yesterday’s sitting of parliament, Hilmy explained that the proposed law would establish a legal framework and set safety standards for the construction industry in the Maldives.

“One of the most important reasons for [submitting] this bill is because important measures are not taken due to the lack of a bill or law while many people have died or suffered serious harm in construction accidents,” the MP for Thinadhoo North said.

The submission of the bill was delayed due to changes made by ministers under successive governments, he added.

The bill proposes the formation of the ‘Maldives Building and Construction Authority’ to function under the Ministry of Housing and Infrastructure.

The authority would be tasked with formulating rules and regulations, setting standards, and ranking and registering contractors and industry professionals.

All MPs who spoke during the ensuing debate spoke in favour of the bill and noted the importance of introducing a Building Act.

However, several MPs argued that the building and construction authority should be an independent institution free from political influence.

Some MPs objected to contractors from the atolls having to travel to Malé to seek permits or licenses while others suggested that the law should incentivise or provide equal opportunity for small and medium-sized construction companies.

Opposition Maldivian Democratic Party (MDP) MP Mariya Ahmed Didi said the submission of important legislation drafted during the MDP’s three years in government were delayed due to the “coup on February 7, 2012.”

As a result of changing regulations and the lack of a comprehensive building code, Mariya said several of her constituents in the Manchangoalhi ward of Malé had requests for construction permits declined.

MDP MP Ahmed Nashid contended that fines specified in the bill were excessive and suggested revisions at the committee stage.

PPM MP Jameel Usman meanwhile noted that the bill includes provisions for incentivising the hiring of locals in the construction industry.

He suggested that the law should also specify a reasonable period for approving construction permits and recommended improvements by the committee.

Jumhooree Party (JP) Leader Gasim Ibrahim contended that the faults in the bill were too numerous to be rectified at the committee and said it should be withdrawn.

As audit reports were exposing “serious corruption and negligence” by government ministries, Gasim argued it would not be advisable to require approval and permits from the housing ministry.

Following the preliminary debate, the bill was accepted unanimously with 61 votes in favour and sent to the national development committee for further review.

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