Former finance minister Inaz leaves MDP

Former Finance Minister Ahmed Inaz has confirmed his decision to leave the Maldivian Democratic Party (MDP).

Inaz did not give a reason for his decision, but told local newspaper Haveeru that the move “puts an end to my political career for now”.

In a response to Minivan News, he said he would “always remain independent and serving the national interest”.

Inaz was appointed after the then-opposition majority parliament unseated Finance Minister Ali Hashim in November 2010, along with six other cabinet ministers.

That vote came after three weeks of disruption in parliament, a stalemate ended only when MPs of the ruling Maldivian Democratic Party (MDP) boycotted the sitting before voting began.

Inaz’s resignation followed an incident in December 2011 in which MDP activists “dragged” him from a car in which he had been spotted hold holding a covert meeting with former president Gayoom’s half brother, MP Abdulla Yameen.

MDP activist Ibrahim ‘Dhonbeli’ Haleem told Minivan News afterwards that he had observed Inaz and Yameen holding a discussion “for two hours” near Male’s South Harbor, “a dark area poorly lit that is only really frequented by boys and girls, not for official business.”

“I told Inaz it was wrong, that Yameen is an enemy and why is he going to this area to hold a business meeting. If he needs to discuss business he should do it in his office.

“Inaz admitted it was wrong, and the MDP activists were yelling and shouting so I took him on my bike to Haruge (MDP headquarters),” claimed Dhonbeli.

Inaz would not confirm that this was the reason for his resignation at the time.

Tax advocate

Inaz’s term as finance minister was characterised by swiftly-enacted tax reforms, passed amid juggling many conflicting political interests and a campaign to sell the concept to the public.

Inaz noticeably took the time to meet with businessmen, parliament and opposition party delegations to explain the reasons and rationales for the various reforms he was implementing.

“All the businessmen I have met – all the reasonable businessmen I have met – believe that the country has to move to a much more structured, predictable and more coherent system of governance. And to do that we need an economic system that supports social change, and supports the change we have brought politically,” he told Minivan News, in an interview in May 2011, shortly after becoming minister.

“To sustain their businesses it is important that they have social and political stability. It would be a grave mistake if one stands up and says they don’t support [income tax], because that will bring instability to the country and harm businesses,” he said.

Under Inaz, the Maldives implemented a tourism goods and services tax (TGST), general GST and business profit tax, and was working towards an income tax for those earning over Rf 30,000 (US$2000) a month. Nasheed’s government maintained that combined, these elements would give a full picture of the money and assets in the country, and avoid the hiding of company tax revenue with individuals.

New Economic Minister Ahmed Mohamed announced at a press conference yesterday that policy of income tax would temporarily be halted, according a report in Haveeru.

Under Inaz, the Maldives Inland Revenue Authority (MIRA) also took over most of the Maldives’ government’s cash handling, greatly reducing petty counter-level corruption across the public sector and giving a single picture of government income.

Inaz also pushed – against subtle but solid opposition – for the rufiya to be used as legal tender for all transactions in the Maldives, aside from tax collection.

Most resorts continue to charge tourists in dollars, a practice which is contrary to monetary policy and technically illegal, but ignored by the Maldives Monetary Authority (MMA). Those dollars swiftly leave the country for more financially-stable shores, instead of generating a demand for the local currency at the point of sale. The country consequently has a dollar shortage, banks have little money to loan, and the average population benefits little from the tourism industry beyond employment – for which they are paid in rufiya.

“What other country has prices in another country’s currency?” Inaz asked Minivan News, in May 2011.

A key moment under Inaz’s term as finance minister came with the discovery that based on income from the TSGT, the tourism economy was 300-400 percent previous estimates.

“Previously we had thought tourism receipts for the country were around US$700 million. But since collection of the 3.5 percent Tourism GST it has come to light that the figure is around US$2.5-3 billion,” then President Nasheed said during a press conference in June 2011.


15 thoughts on “Former finance minister Inaz leaves MDP”

  1. "New Economic Minister Ahmed Mohamed announced at a press conference yesterday that policy of income tax would temporarily be halted."

    But, of course! This was the least we expected from these guys. The country will be run according to the wishes of the tycoons who took control of the country on 7th February.

    Why else would Mr Ahmed Mohamed halt the policy of income tax, apart from succumbing to pressure from his paymasters?

  2. Let me point out to some inconsistencies in the statements by Mr Ahmed Mohammed, the new economic minister.

    He claims that national debt has increased from MRf 9.8 billion to MRf 23.2 billion, since 2008. That means that the national debt increased by MRf 13.4 billion over the last 3 years.

    Mr. Mohammed claimed that the massive increase in debt was due to the borrowing of various state enterprises, citing a figure of MRf 818 million last year. Even if these state enterprises were swallowing MRf 1 billion per year, that accounts for just MRf 3 billion of the debt over 3 years. Where did the rest of nearly MRf 10 billion come from?

    He also said that the state needs nearly MRf 1.2 billion just this week alone! Is this a typicall extravagant week in the economic calendar of the state? That can't be a typical week, since that level of spending will require over MRf 60 billion over a year!

    Another figure he quoted was an average weekly Treasury Bill sale of MRf 500 million. Now, there are 52 weeks of the year and even accounting for working weeks alone, this is a hefty sum of over MRf 20 billion!!! Mr. Mohammed, your sums do not add up! There must be a large gaping hole in your Excel spreadsheets!

  3. Apart from a very few, all policies of MDP will be halted. There can be nothing good MDP have done or would have done! Now matter how or what! This was very obvious!
    We are gone back to the dogs!

  4. The current Economic Minister is a programmed body that belongs to Qasim backed by Yaameen

  5. Inaz is a principled politician (a contradiction of course!) who resigned over some landmark changes to the economy, most notably taxation. He should now head the Economic Council to solidify the changes in an impartial manner.

  6. @tribute on Wed, 22nd Feb 2012 4:00 PM

    "Inaz is a principled politician ..."

    who was found in the back seat of Yamin's car in a very dark alley in Male, apparently discussing "business". Hmm, yeah, right, of course he will do well in an "Economic Council".

  7. “What other country has prices in another country’s currency?” Inaz asked Minivan News, in May 2011.

    I agree with this, enact laws that MRf be the legal tender even within resorts, licensing money exchangers, will give a much more exact picture of all the foreign currency entering the economy.

  8. @Ahmed bin Addu bin Suvadheeb
    He was not in the backseat. Look at the pictures of then. Yameen was in the driving seat and Inaz was siting next him atfront. Please get your facts correct!

  9. I hope Inaz will not dirt his personality by getting into the political mess at any cost. He and few others in Maldives holds a hope to real reform in the Maldives. I have alot of expectation on this young exMinister. True loss for MDP.

  10. @mohamed on Wed, 22nd Feb 2012 11:51 PM

    "He was not in the backseat. Look at the pictures of then. Yameen was in the driving seat and Inaz was siting next him atfront."

    Oooh, I stand corrected. To be honest, I didn't pay particular attention to their individual orientation inside a very dark vehicle parked in a dark alley in Male.

    As far as I'm concerned they might have been joined at the hip at the time, but I couldn't care less. What astonished me was the incredible naivety of Mr Inaz! His political career was deliberately sabotaged by Yamin.

  11. @Ahmed bin Addu bin Suvadheeb bin matter how you try to twist the facts to fit your point of view the truth of the matter is ..the inept MDP led government has drove this country into more dept than the 30 yr old government. Housing projects a mess, corruption rampant, Nasheed ridiculing islam, selling all our companies, appointing so many political posts to some 67 government companies which makes no profit whatsoever but a drain on our budget.....Of course but people like you do not care because you don't love our country and our religion but because you can make a quick buck without work by worshiping your spiritual leader Anni. May almighty keep Anni and his gang of thugs far far away from corridors of power in Maldives...We want to keep Maldives the sunny side of life for ever...We love our country and we not let Anni or anyone else rape it from its riches and religion.

  12. One must wonder if Inaz did meet Yameen intentionally due his flustrations towards MDP core (hijacked by elites) and he purposely tipped it and now he is free. I heard he was against Anni for his drinking habbits(anti Islam issues) and wide spread corruption. Anni made a mistake of appointing an untammed individual to that post unlike many of his other ministers like defence minister who was bankrupt to his nose! It seems to me Inaz is playing a chess game with Anni.

  13. I applaud all those who question religion. Why should you all follow something with blind faith , look at the Nazis and what happened there. you may argue faith, but I argue facts. Most of the worlds problems are caused by religion. Its pretty much a code of ethics to live by, and most have the same basic principles. Yet we fight and argue with each other over whos codes are right, and condemning everyone else. this is what makes me lose my faith. Not perfect but living a good life, better than some of these hypocrites around.

  14. Inaz, you did the right thing,A wee bit late but better late than never.MDP has been hijacked by some rotten rogues.We must clean the party of these corrupt thugs.Until then we must all follow Inaz's example.

  15. Public sector is not very sense making to ordinary even technical best accountants in private sector bcox how gvt is being finance and d nature of spending would never be truly envisaged until and unless u get chance to work with those numbers, so don't post comments here as u knw every thing bat finance jet by holding CIMA or Acca,or graduate degree for that matter,


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