Minister for Tourism Ahmed Adheeb has said that the Tourism Ministry will work on ways to increasing its revenue, acknowledging that income lost from changes to island lease payments would leave its earnings far short of those predicted in the budget.
“The expected amount from lease rent will not be acquired within the year. This is about Rf 500 million (US$32 million). We are looking for ways to compensate for the loss. Discussions on the issue will start next week,” Haveeru reported Adheeb as saying.
The current government recently re-interpreted a clause in the Tourism act, allowing the payment of island lease extensions to be made in installments rather than up front, as had previously been the case.
The Maldives Inland Revenue Authority’s (MIRA) figures for March revealed that the government received over Rf350 million (US$23 million)less that month than anticipated in the budget.
The IMF’s suggestions that the Tourism Goods and Services Tax (TGST) be raised to 12 percent would not be the only method discussed within the ministry to compensate for the lost income.
“The discussions are not to simply discuss increasing the amount of TGST charged from resorts. The government has not decided to increase TGST to 12 percent. The government wants to find out the ways from which the tourism industry can compensate for the amount of predicted loss,” Haveeru reported.
The Majlis Financial Committee revealed this week that the current budget deficit would reach 27 percent of GDP by the end of this year.
Head of the Majlis’s Financial Committee, Deputy Speaker and People’s Alliance (PA) MP Ahmed Nazim, revealed that government revenue for 2012 would be Rf2.6 billion (US$168.6 million) less than the projected amount of Rf10.87 billion (US$704 million) – a drop of 23 percent.