Category: Politics

MP Muthalib re-joins Adhaalath Party

Former Adhaalath Party MP Ibrahim Muthalib, who resigned from the party and joined the Jumhoree Party (JP) until August this year, has re-joined the Adhaalath Party.

In a statement, the party said that Muthalib resigned from the party due to differences in opinions between the party’s then leadership.

‘’Many citizens hope that other MPs in parliament who love the nation and the religion will join Adhaalath Party,’’ the Adhaalath Party’s statement said. Muthalib was the first treasurer of the Adhaalath Party.

Muthalib resigned from JP – led by local business tycoon Gasim Ibrahim – claiming that his dreams of making the JP the country’s third most active party had been “shattered due to lack of cooperation.”

‘’I resigned because I did not want to remain depressed with these thoughts. For now I just want to relax and remain independent for the time being,’’ Muthalib said at the time. Newspaper Haveeru quoted Muthalib as saying that his resignation came following Gasim’s vote in favor of the appointment of Dr Ibrahim Didi for Fisheries Minister and Thalhath Ibrahim for Defense Minister.

Until Muthalib last night joined Adhaalath, the party had no MP representing them.

Today Muthalib told Minivan News that he decided to join Adhaalath because the party was in need of his assistance and ‘’I have always said that I would join Adhaalath when the change I needed to bring to the party was brought. I resigned from Adhaalath Party on November 2011, and although when I was elected to the parliament I was registered in the Adhaalath Party, I was elected as an Independent MP,’’ Muthalib said.

‘’I had to resign from the Adhaalath Party because of some issues I don’t want to talk about right now,’’ he said. ‘’After resigning from the Adhaalath in November, I joined the Jumhoree Party at the request of some persons, and I worked to make the party a strong opposition party. But it did not work out that way so I had to resign from JP.’’

‘’I want to work with the scholars, I think that is the only way we can set this country the right way – by working with the scholars,’’ he added.

The Adhaalath Party recently terminated the coalition agreement made between the government, and asked Islamic Minister Dr Abdul Majeed Abdul Bari and State Islamic Minister Sheikh Hussain Rasheed to resign from their positions.

Dr Bari respected his party’s decision and resigned from the position yesterday, while Sheikh Hussain has said that he will not resign unless the President requests him to do so.

Dr Bari meanwhile withdrew his resignation from the Adhaalath Party’s religious council, of which he was formerly chairman.

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MP Ismail Abdul Hameed appeals Criminal Court ruling

MP Ismail Abdul Hameed, who was recently sentenced to one year and six months banishment after the Criminal Court found him guilty of corruption, has appealed the case in the High Court.

The Prosecutor General pressed corruption charges against Hameed alleging that he had abused his authority as the former Director of Waste Management at the Male’ municipality to financially benefit a Singaporean company named Island Logistics, in a deal to purchase a barge.

According to local media reports that time, Judge Abdulla Didi noted in the verdict that the agreement stipulated the barge was to be delivered within 90 days of signing the agreement, upon which 50 percent of the value was to be paid to Island Logistics.

Although the barge arrived in the Maldives on October 23, 2008, Hameed had however signed a document claiming that the barge was delivered on schedule on April 28, 2008.

The judge ruled that Hameed’s actions were intentional and in violation of the Anti-Corruption Act.

Under article 73(c)(3) of the constitution, MPs found guilty of a criminal offence “and sentenced to a term of more than twelve months” would be stripped of their seat.

Article 78 of the constitution meanwhile states that “whenever there is a vacancy among the members of The People’s Majlis, an election shall be held within sixty days from the date of the vacancy. A by-election shall not be held within six months prior to a general election.”

However, Elections Commissioner Fuad Thaufeeq previously told Minivan News that the commission does not consider the seat in the parliament is vacant, and noted that Hameed had requested the commission to delay the by-elections as he planned to appeal the case.

When Minivan News contacted Hameed for a comment today, he said he was busy.

Meanwhile, Jumhoree Party (JP) Youth Wing leader Moosa Anwar filed a case in the Supreme Court, requesting the court  determine whether the Kaashidhoo seat should be made vacant after the Criminal Court ruling or if it would  be vacant after appeals were exhausted.

The case was first rejected however Anwar resubmitted the same case to the Supreme Court on September 26. No further information about the case has been reported.

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“Democratisation has its costs”: Maldives comes to terms with tax reform

The Maldives is coming to terms with a reformed tax system, following the introduction of a General Goods and Services tax this week.

Finance Minister Ahmed Inaz said the new system, which has raised the eyebrows of businesses, consumers and politicians alike, is a natural consequence of recent political changes and requires everyone’s support to function sufficiently.

“I think anybody could see that after the 2005 democratic reform, costs increased. These costs had to be met by additional revenue, but they weren’t,” he said.

Currently, the Maldives’ has a state deficit of Rf1.3 billion (US$85 million). Since democratisation, the Maldivian government has surpassed other national governments’ employment rates by employing 10 percent of the national work force. One third of government spending goes to state employees, and nearly half of the 2011 budget was spent on salaries and allowances.

The Goods and Services Tax (GST), which became operative on October 2, has raised a 3.5 percent tax on certain items. Contrary to an earlier tax which was paid for at the point of import and effectively invisible to the customer, the GST requires most businesses to charge an additional 3.5 percent directly to the customer at point of sale.

Certain items are tax exempt, a detail which has allegedly made it difficult to implement at stores selling a variety of products.

Inaz is optimistic that new tax reform system will cut costs and improve business operations. He said many businesses are compliant with the new measures, and are trying “their level best to be sure that this happens.”

“Business owners will have to crunch the numbers, and that will show them more about what is happening in their businesses. They will be able to better see how things operate.”

The GST is part of a larger tax reform system described in “a package of policy reforms that will help stabilise and strengthen the Maldives’ economy” agreed to by the Maldives and the International Monetary Fund (IMF) in May.

The policy reforms include raising the Tourism Goods and Services Tax (TGST) from 3.5 percent to 6 percent from January 2012, and to 10 percent in January 2013. Tourism is one of the Maldives’ leading economic contributors.

Inaz stressed that the tax was a step towards self-sufficiency for the Maldives.

“The international community will not give us the money required to balance our deficit, it is us who have to raise that money and that’s everyone’s responsibility. We have to make sure we can stand on our own feet.”

Meanwhile, opposition party Dhivehi Rayyithunge (DRP) has expressed concern over the tax. After supporting its initial pass through Parliament, DRP released a booklet titled “DRP’s response to the government’s economic nuisance package.” The booklet said businesses were not sufficiently prepared for the transition, and requested a six month delay.

Noting “administrative confusion” and the country’s heavy reliance on imports, the DRP also suggested levying a customs duty at the entry point to the country as a more effective means of raising revenue.

“We believe the GST is a regressive expense. The government doesn’t have the infrastructure to support it, implementation of GST means it will have hire a lot of people.”

DRP Spokesperson Ibrahim ‘Mavota’ Shareef said today that the tax system had not been implemented prematurely, but that it would only benefit large businesses while harming smaller ones.

“The government is doing the opposite of what it preaches,” he said. “Our main problem with the bill is that the government has decreased the tax burden on the very rich, especially in the tourism sector. We want to see the current tax system overhauled and replaced with a modern one.”

Shareef said DRP supports other progressive taxes, and was in favor of the recently announced plan to decrease import duties starting in January 2012.

President Mohamed Nasheed yesterday said a policy to reduce import duties would bring prices down starting early next year.

The President’s Office Press Secretary Mohamed Zuhair told Minivan News that the waiving of certain import duties would be significant.

“Once the new tax system is fully operating, all will fall into place. Prices will drop to even lower than originally,” Zuhair said.

A bill to finalise the tax system is currently before the Majlis, and is expected to take another two or three months to be properly processed.

During the President’s tour of retail, grocery, and supermarket stores on October 3, Zuhair said that operations were “running smoothly”.

“The only issue was that many businesses had a shortage of coins. Maldivians have a habit of rounding up to avoid coin transfers, but in a successful economy coins are important. Maldives Inland Revenue Authority (MIRA) has been doing a commendatory job in distributing coins, and the Maldives Monetary Authority (MMA) foresaw the issue and has a distribution system in place,” he said.

When asked about the DRP’s opposition to the GST, Zuhair alleged that the party’s motives were political.

“They made their case to the President, but the President was advised by his advisors and economic experts that a taxation system needed to be implemented,” said Zuhair.

“It is true that the very rich have not been taxed appropriately as per their earnings,” he acknowledged. “Once the tax system is fully in place, things should stabilise.”

Shareef did not accept that there were political motivations behind the DRP’s objections. “It’s an economic and social issue, concerning the distribution of wealth,” he said.

Inaz did not wish to comment on the matter. “This is an economic issue,” he said.

State Minister for Finance Ahmed Assad previously observed that even with the new taxes proposed by the government, the Maldives still had the most generous tax system in the region – even compared with other island nations, and neighbouring countries such as India and Sri Lanka.

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Maldives remains “partly free” environment for media: Freedom House

Media freedom has remained steady in the Maldives following significant gains in 2009, according to a report by Freedom House.

The country was found to be a “partly free” environment for media, with the constitution protecting freedom of expression “but also restricting freedom of speech ‘contrary to the tenets of Islam’.”

The report was published prior to the release of new regulations enforcing the Religious Unity Act, which bans media ‘from producing or publicising programs, talking about or disseminating audio ‘that humiliates Allah or his prophets or the holy Quran or the Sunnah of the Prophet (Mohamed) or the Islamic faith’,” imposing a 2-5 year prison sentence.

Freedom House noted that the overall legal framework protecting free expression “remained weak, with many proposed media reform bills still awaiting passage”, however it praised parliament for passing an amendment to the penal code in 2009 decriminalising defamation.

The organisation noted that legislation to transform the state broadcaster, the Maldives National Broadcasting Corporation (MNBC), into the Maldives Broadcasting Corporation, a public broadcaster, “was passed in April 2010, but the government delayed implementing the handover.”

Increased media diversity had improved coverage of major political events, including by the state broadcaster, “though the [MNBC] still suffers from pro-government bias.”

Investigative journalism, Freedom House noted, “remains hampered by the lack of an access to information law and a culture of secrecy at government departments.”

While the formation of the Maldives Media Council (MMC) was “cautiously welcomed”, given the preference of advocacy groups for self-regulation, the elections process was criticised for not being sufficiently transparent, and former members of political parties were nominated as candidates to the Council.”

The MMC is currently facing criticism from the Anti-Corruption Commission (ACC) for the payment of almost a million rufiya in “living allowances” to Council members beyond their stipulated salaries.

On the advocacy side, Freedom House observed that the Maldives Journalist Association (MJA) “regularly made statements regarding media freedom issues and journalists’ rights during the year, accusing the government and political leaders of interference with the private media in a number of cases”, however it noted that “an alternate group, the Maldives National Journalists’ Association (MNJA), was founded in 2010, reportedly in response to the perceived politicisation of the MJA.”

Private print media had expanded and represented a wide variety of viewpoints, the Freedom House report noted, “however some publications are owned by allies of former president Maumoon Abdul Gayoom or other political actors, who exercise considerable control over content. Most newspapers are not profitable and rely on financial backing from businessmen with strong political interests.”

The government had “generally” avoided interfering with internet access, used by approximately 28 percent of the population in 2010, however “the Ministry of Islamic Affairs announced in 2008 that Christian and anti-Islam websites would be blocked, arguing that they could negatively affect belief in Islam, and a number of websites were blocked by the Telecommunication Authority at Ministry’s request during 2009.”

Journalists meanwhile remained subject to “some harassment”, with incidents including an attack in August 2010 on the offices of VTV by “unknown assailants”, “and a police attack on journalists covering a political protest in October.” Verbal attacks included threats against media outlets from Maldives Democratic Party (MDP) MP Reeko Moosa, and repeated death threats against certain bloggers “from Islamist extremists”.

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Islamic Minister Dr Bari resigns

Islamic Minister Dr Abdul Majeed Abdul Bari has resigned from the position after pressure from the Adhaalath Party.

He confirmed to Minivan News today he that he had submitted the resignation letter to the President’s Office.

”I resigned out of respect for the decision made by the Adhaalath Party to break its coalition agreement with the government,” Dr Bari said. ”I sent the letter today and they have not responded yet.”

Dr Bari said that although he had resigned from the position as well as the Chairmanship of Adhaalath Party’s Religious Council, he would “remain active in politics.”

Recently, Dr Bari and State Islamic Minister Sheikh Hussain Rasheed Ahmed were asked by the Adhaalath Party to resign, however Sheikh Rasheed issued a statement explaining his refusal to do so.

Dr Bari had earlier resigned from the Chairmanship of Adhaalath Party’s Religious Council.

Today he told the media that he had resigned from the council’s chairmanship after the council issued a statement against his view on Imams, reciting Bismi aloud and permanently reciting Qunoot in Fajr prayers.

The President’s Press Secretary Mohamed Zuhair confirmed to Minivan News that Dr Bari had submitted his letter of resignation, but said President Nasheed had not had a chance to read it yet as he had been out this afternoon observing the implementation of the goods and services tax (GST).

Zuhair said he was “surprised” by Bari’s decision as he had “worked patiently and in accordance with the government’s policy” prior to his resignation.

“Even with the religious unity regulations, he worked patiently with the government in a non-partisan way, and he had the last word before it was published,” Zuhair said, noting that Bari had chosen the government’s side in 2009 over its previous alliance with the Jumhooree Party (JP).

Zuhair added that the President valued Dr Bari’s contribution and “patient and academic efforts” as Islamic Minister.

It was too early to speculate on a replacement, he said. However speculation today was that Sheikh Rasheed was among the most likely candidates.

Sheikh Rasheed did not respond to Minivan News at time of press.

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State cannot afford subsidies for fishermen: Finance Minister Inaz

Finance Minister Ahmed Inaz told parliament today that the state would have to reduce other subsidies to issue Rf100 million (US$6.4 million) as oil subsidies for fishermen.

Responding to a query during Minister’s Question time at the first sitting of this year’s final session of parliament, Inaz explained that parliament had approved reducing amounts from other budget items to free up funds to subsidize oil for fishermen.

“It would have been easier if parliament had decided to reduce from a particular item,” he said, noting that potential items included subsidies for water, oil and foodstuffs as well as state benefits for persons with special needs.

“If we cut any of the [budget] items, we would be cutting basic needs,” he said. “The Majlis has not asked the government to cut any particular item so the government cannot cut any item and hasn’t been able to find a fair way to issue subsidies for fishermen.”

Inaz noted that there were other government policies geared towards assisting fishermen and developing the industry.

The Finance Minister added that the 2011 budget was structurally in deficit and oil subsidies could be issued after new tax revenue is collected.

The oil subsidy was added to the budget by parliament when it approved the 2011 state budget in December last year.

During today’s debate on a binding resolution proposed by MP Riyaz Rasheed to compel the government to issue the fishermen’s subsidy, opposition MPs insisted that delays to releasing the funds were “unacceptable” while the government was continuing its “wasteful and useless expenditures.”

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DRP condemns Gayoom’s remarks on losing ground to MDP

Dhivehi Rayyithunge Party (DRP) has condemned its erstwhile ‘Honorary Leader’ and former President Maumoon Abdul Gayoom for saying the ruling Maldivian Democratic Party (MDP) outpaced the main opposition party while it was “in a slumber.”

Speaking at a rally in Thaa Atoll Guraidhoo on Saturday, Gayoom reportedly said that the MDP became both the largest political party and the majority party in parliament after the new DRP leadership took over.

In a statement put out yesterday, the DRP said Gayoom’s remarks concerning the party were misleading and “contained serious lies.”

Among the alleged falsehoods, the statement noted that the MDP came to power in 2008 after defeating Gayoom, who was DRP’s presidential candidate and ‘Zaeem’ at the time.

“One of the main reasons for DRP having to face one of its biggest defeats and MDP coming to power and causing despair for most citizens was the fact that the whole presidential campaign was run by Gayoom’s eldest son Farish Maumoon as a family matter,” it reads.

It adds that while the DRP under the leadership of Ahmed Thasmeen Ali emerged successful in the past two elections, “we note with regret that the party was unable to win a single election under President Maumoon’s leadership when it was in the government.”

On the loss of MPs in parliament, the statement noted that former President Gayoom lost majority control in the past despite the presence of eight appointed MPs after brother Abdulla Yameen left the DRP with a number of MPs.

Moreover, the statement continues, it was “questionable today” whether the Z-faction’s public criticism of the DRP leadership and “pointing accusatory fingers at the DRP, the party’s leadership, MPs, councillors, senior members sweating to enliven the party in the islands and the party’s common members” was in the service of “the nation and religion.”

The statement concludes by saying that since infighting among the opposition would benefit the ruling party, “it has become clear to the public today that such actions shows the lack of truthfulness and sincerity of the people around President Maumoon.”

Gayoom meanwhile returned to Male’ today after visiting islands in Laamu and Thaa atolls to promote the incipient Progressive Party of Maldives (PPM) and recruit new members.

The former DRP Zaeem was quoted in local media as saying that the DRP lost ground to the ruling party because of “lack of effort and attention” by the new leadership.

“We cannot achieve anything in the political arena in such a state,” Gayoom said. “That is why we are forming this party. We are forming PPM for a noble purpose.”

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MMC members received almost Rf 1 million in illegal “living allowances”, finds Auditor General

Members of the Maldives Media Council (MMC) have been illegally receiving a living allowance of Rf 7500 (US$500) in addition to their monthly salaries, according to an audit report for the year prepared by the Auditor General’s office.

The Auditor General’s report noted that the article 19[a] of MMC Act states that salaries of Council’s Chair, Vice Chair and members shall be determined by the parliament, and that the salary for the council member determined by the parliament on January 2011 was Rf 8000 (US$533) for the Chair of the Council, Rf 6500 (US$433) for the Vice Chair, and Rf 5000 (US$333) for each council member.

The report observed that council members started receiving the allowance on January 20, 2011, after the Chair of the Council sent a signed memo to the council’s corporate affairs unit.

The Auditor General at the time was aware of the matter and forwarded the case to the Anti-Corruption Commission (ACC) and on February 17, 2011, the ACC sent a letter to the council asking it to stop claiming the allowance until the ACC concluded the case.

‘’On February 20, the council members held their 7th meeting of the year and in the meeting all members voted that there was no reason why the council should follow instructions as in the letter sent by the ACC,’’ the audit report noted.

On April 20 council members decided not to receive the allowance, after they were asked by ACC to discontinue a second time. The MMC then sent letters to council members asking them to return the amounts they had received as living allowances – by now a total of almost a million rufiya, in addition to their salaries.

According to the Auditor General’s report, the council members did not receive the living allowance for six months from May to August. However a lump sum for six months worth of the living allowance sum was included in council members’ salaries for August – a total of Rf 45,000 (US$2900) for each council member.

The report also stated that by the end of August the council had spent a total Rf9 00000 (US$60,000) on paying members living allowances.

The Auditor General’s report stated that the living allowance was an illegal expense, despite parliament approving the MMC’s budget including the allowance, and noted that the MMC had behaved inappropriately for an institution that was required by nature to have the trust and confidence of the public.

Chair of the MMC Mohamed Nazeef told Minivan News that the issue “had been solved”, and that “some” of the council members had now returned the money they received as living allowances.

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Opposition launches campaign against income tax

The opposition Dhivehi Rayyithunge Party (DRP) launched “a special campaign” yesterday against the introduction of a personal income tax in the Maldives.

Speaking at a press conference at private broadcaster DhiTV, DRP Leader Ahmed Thasmeen Ali said that “the purpose of our campaign is to undertake efforts to inform citizens as broadly as possible of the effect of [the introduction of income tax].”

“Considering the state of the country today, economic growth has been considerably stalled,” he said. “The base for income tax – the tax base – is very small. If you look at the tax brackets, the number of people who have to pay income tax is very low. This is because our development has not reached that level and most citizens are not wealthy. This is something we have to consider before introducing such a tax.”

The consequences of levying a personal income tax under the prevailing economic circumstances would be reduced investment, slowed economic growth and worsening unemployment, Thasmeen argued.

As the number of people who earn Rf150,000 (US$9,700) a month are quite few, said Thasmeen, an additional tax burden would discourage them from investing and incentivise down-sizing or cost-cutting measures, such as layoffs, in their businesses.

In August, the party issued a booklet titled “DRP’s response to the government’s economic nuisance package” noting that all citizens would have to file tax returns.

“The charts of the government’s fiscal and economic nuisance package show Rf300 million will be received in 2012 from income taxes and 475 million in 2013,” it reads. “Instead of making all citizens file tax returns in order to earn 475 million two years after taxes are introduced, it would be far better to reduce the government’s useless expenditure by that amount.”

Thasmeen meanwhile asserted that administrative costs for collecting the income tax would be prohibitive: “MIRA [Maldives Inland Revenue Authority] has not revealed the figures yet, but we believe that will be a surprisingly high amount,” he said.

Following a meeting with Thasmeen in August to discuss the government’s economic reform bills currently before parliament, President Mohamed Nasheed told press that the minority leader of parliament had expressed concern with the personal income tax.

While the government was open to suggestions of lowering or reviewing the proposed tax rates, Nasheed said at the press conference following the meeting that financial experts had advised the government that an income tax was necessary for the tax regime to function as a whole.

Progressive taxation

Presenting the draft income tax legislation to parliament on July 18, MP Ilyas Labeeb of the ruling Maldivian Democratic Party (MDP) said that the purpose of the economic reform package was shifting away from custom duties in favour of direct taxation in the Maldives for the first time.

“Income tax will be taken from individuals whose total monthly income from their salary or other sources exceed Rf30,000 (US$1,900),” Labeeb explained. “The tax will be taken from income above that amount.”

All citizens and non-citizens who earn their income in the Maldives will be eligible for the tax. For naturalised citizens and residents, income earned abroad will be taxable as well.

Ilyas explained that the income tax would be progressive and divided into five tax brackets, whereby people with higher income would pay higher rates.

The tax rates are set at three percent for monthly incomes between Rf30,000 to Rf40,000; six percent for incomes between Rf60,000 and Rf100,000; nine percent for incomes between Rf100,000 and Rf150,000; and 15 percent for Rf150,000 and higher.

The legislation specifies 15 sources of income that would be considered taxable, Ilyas continued, while Zakat funds (alms for the poor), pension contributions, interest payments and capital allowance or investment would be exempt from taxation.

Individuals would meanwhile be required to submit an annual personal income tax statement.

If passed, the income tax law will come into effect on January 1, 2012.

Ilyas observed that the introduction of a 3.5 percent tourism goods and services tax (TGST) in January this year had revealed that the country’s GDP per capita was closer to US$4,060 than the previous estimate of US$2,840.

“We learned that the Maldivian economy is such that each citizen should get close to Rf5,000 (US$300) a month,” Ilyas said. “[But] the country’s wealth is shared by disproportionately few people. One in four people do not make even Rf1,000 (US$60) a month.”

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