MIRA accuses Tourism Ministry of not collecting resort rents

Commissioner General of Taxation at the Maldives Inland Revenue Authority (MIRA), Yazeed Mohamed, has named the Tourism Ministry as the prime culprit amongst state institutions which are failing to collect payments owed to the government.

“If rent on resorts is not paid, the Tourism Ministry must take action in accordance with the agreement. But so far no such action has been taken against anyone,” Yazeed told local newspaper Haveeru.

As MIRA was not party to the agreements made between certain government institutions and third parties, it could not itself enforce or implement payments, he explained.

“If rent is not paid we have to take it up in court. That is to obtain payments not paid for a certain period. Then it is used as an excuse. From that point on they get a free license to stay without making payments. Once a case is filed in court, it can go up to two years without a single payment,” Yazeed told Haveeru.

“Not everybody is penalised equally. There is no differentiation between the parties that pay the amount that is owed or the ones that don’t,” he added.

Despite not collecting payments such as land rents and associated fees, MIRA includes such figures on its monthly statistics.

The figures for August showed that ‘Tourism Land Rent’ collected last month was only 19 percent of the amount collected in the corresponding period last year.

Tourism land rent for the year so far is shown to be only three quarters of that collected by the same point on 2011.

The importance of this revenue stream can be seen in the share of overall revenue tourism land rent alone contributes to the authority’s figures – making up 10 percent of MIRA’s income this year.

Former Economics Minister Ahmed Inaz told Minivan News today that this issue was also a problem under the former Maldivian Democratic Party (MDP) led government.

“The system is not transparent or fair – under the Nasheed government or now,” said Inaz.

“The Judiciary and executive should penalise industries which are penalising the system. The system should be designed for all, not individuals,” he said.

Dr Mariyam Zulfa, Tourism Minister under the Nasheed administration, disputed the suggestion that any resort owners received preferential treatment during her tenure and said that non-compliance was always a problem, everywhere.

“Only about 10 percent of resort operators failed to comply. In every country there are those who do not comply with taxation legislation’s requirements – the Maldives is no different” she said.

MDP members have persistently linked powerful resort owners with what it perceived to be a coup d’etat which saw President Mohamed Nasheed leave office in February.

Shortly after the transfer of power, there was a re-interpretation of the legislation governing island lease extensions which Zulfa predicted would severely reduce government revenue.

“The Nasheed government had requested that those resorts extending to a 50 year lease pay in a lump sum,” she said at the time, “but while I was Tourism Minister, Gasim Ibrahim and Ahmed ‘Redwave’ Saleem kept pressuring me to let them pay on a yearly basis.”

“They didn’t want to give any money to the government, and soon after the government changed they got what they wanted. [The installments] will only be payable at the end of the current lease periods – it is a huge loss to the treasury,” she added.

MIRA’s figures show that revenue from lease period extension fees has been US$11million (MVR168million) so far this year, compared to US$20million (MVR273million) at the same point in 2011.

Minister of Finance and Treasury Abdulla Jihad told the Majlis’ Finance Committee earlier this week that state revenue was expected to be MVR3.1billion (US$200million) less than expenditure this year.

Neither the current Minister for Tourism – Ahmed Adheeb – nor the Deputy Tourism Minister – Mohamed Maleeh Jamal – were responding to calls at the time of press.


All-party talks reconvene amidst optimism on both sides

Representatives from both sides of the political divide have expressed optimism over the continuation of Indian-sponsored all party talks, which reconvene tomorrow after stalling on several previous occasions.

The talks include representatives from nine political parties and are intended to diplomatically resolve the upheavals experienced since February’s controversial transfer of power. Despite agreeing on an agenda for the discussions, the talks have ended in stalemate on numerous occasions since first being proposed.

The discussions were last halted earlier this month after certain government-aligned politicians questioned the legitimacy of the MDP members present following the passing of a no confidence motion by the party’s national council against its president and vice president.

While former MDP president Dr Ibrahim Didi continues to contest his dismissal along with former Vice President Alhan Fahmy, the Elections Commission (EC) has since said that it found “no evidence” that the vote was unconstitutional under basic regulations.

Ahead of the talks reconvening tomorrow, MDP representatives claim they are “optimistic” that the discussions can still lead to the establishment of dates for early elections, along with other agreements on reforming the fractious political landscape. However, the party has expressed concerns over alleged attempts by some participants to stymie the talks without first reaching any meaningful agreements on early elections.

Speaking to Minivan News today, President’s Office Spokesperson Abbas Adil Riza claimed the government was committed to the talks, insisting that all parties needed to agree on the direction of any resolution to the present political stalemate.

However, Abbas added that the MDP, which contends it was removed from office by a coup d’etat and replaced with President Mohamed Waheed Hassan’s “illegitimate government”, would be required to guarantee “peace” and “security” if talks were to continue successfully.

“The government is insistent that all parties should agree on certain things for the talks to continue,” he said. “These things include ensuring stability and calm.”

Mosque clashes

Abbas criticised protests conducted across the capital of Male’ over the weekend that reportedly saw some demonstrators interrupting a mosque service on Majeedhee Magu.  He said that the demonstrations, which led to clashes between demonstrators and the people inside, were a particular concern going forward for reaching an agreement.

“Some of these protesters are now attacking mosques. This level of fundamentalism that we have seen over the last two nights is not acceptable,” he said.

Clashes between the protesters and some of those inside the mosque led to the arrest of five people, Police Sub-Inspector Hassan Haneef said yesterday. The unrest is said by an eyewitness to have begun when MDP supporters attempted to disrupt a sermon which Male’ City Council had said was unauthorised.

Abbas claimed that the talks had previously been stalled after the MDP boycotted President Waheed’s opening address to parliament.  The speech was eventually given during a reconvened Majlis session, amidst heckling from MDP MPs in the chamber.

With the boycott now in the past, Abbas claimed that the MDP would be required to ensure it conducted itself in a “calm and peaceful manner”. He added that the government was ultimately confident that the issues related to the all party talks’ agenda would be resolved going forward.

Former Tourism Minister Dr Mariyam Zulfa, who is one of two MDP representatives sitting on the talks, said today that she was baffled by demands for the cessation of ongoing protests that had been held regularly across Male’ and the wider atolls since February.

“We have been accused of creating unrest though legal protests that we have been holding, and they have asked us to stop this,” she said. “We are simply expressing our freedom to demonstrate, so it is baffling that we are being accused of creating unrest.”

“Very optimistic”

Zulfa alleged that issues such as stopping protests, as well as the dismissal of its former president and vice president by national council vote, continued to be used as a means to try and deviate from the previously agreed roadmap talks.

However, she claimed the party was “very optimistic” that the talks could realistically lead to setting a date for early elections, as well as ensuring a broad consensus on other democratic reforms.

While having been previously critical of the intentions of other parties towards “cooking up” stalling tactics to block the talks, Dr Zulfa said that a comprehensive agenda for the discussions under mediator Ahmed Mujuthaba had been outlined.

“What we really hope for right now is that all the parties participate in these talks seriously,” she said. “We need to agree on prioritising items on this agenda, otherwise there will be a problem going forward.

Zulfa contended that the MDP itself had a “natural interest” in moving the setting of a date for early elections towards the top of the talks’ agenda.

She claimed that failure to do so in favour of other reforms would only serve to delay attempts to set early elections this year. Early elections during 2012 are backed by the MDP, as well as by international organisations like the Commonwealth and the EU.

“The whole idea of these talks is to iron out the differences we are having [with other parties]. Originally, it was agreed by all parties that early elections should be held. However, the representatives went back to their parties and suddenly they are now not agreeing on this,” she said.

President Waheed’s government has said that the earliest elections can be held under the constitution would be July 2013. The claims are denied by the MDP, which has said that elections could be held this year upon the resignation of the president.

Despite the government’s stance, Zulfa claimed that certain individual party leaders working within the coalition government such as Dhivehi Rayithunge Party (DRP) leader Ahmed Thasmeen Ali and Jumhooree Party (JP) head Gasim Ibrahim were both preparing for fresh polls.

“I am optimistic that these early elections can be achieved. If you look at the individual parties, Mr Thasmeen has maintained he is ready for elections. Gasim Ibrahim has also been talking about himself as a presidential candidate,” she said. “The only party I believe is not ready is the progressive Party of Maldives (PPM) – though they are a major power broker right now.”

Zulfa alleged that despite the encouraging level of impartiality shown during the talks by convenor Ahmed Mujuthaba and negotiator Pierre-Yves Monette, discussions needed to be held with each party to assure there was sincerity to reach an eventual agreement.

“We need both the convener and negotiator to sit down individually with all the parties and see if there is any common ground that can be reached, until then they may not be much point in coming together,” she said.

Zulfa alleged that during previous sessions of the all-party talks, representatives for President’s Gaumee Ithihaad (GI) party has said that even in a potential situation where Dr Waheed might opt to resign from his position, they would not allow him to do so.

According to Zulfa, on other occasions delegates in the talks claimed they would not concede to giving the MDP an early election.


MNCCI waits on Adeeb parliamentary backing before appointing new president

The Maldives National Chamber of Commerce and Industry (MNCCI) will wait for current president Ahmed Adeeb to receive parliamentary approval for his appointment as Minister of Tourism Arts and Culture before replacing him in the organisation.

Speaking to Haveeru, current MNCCI Vice President Ismail Asif said the organisation was in the process of setting out an election process to appoint a new president.

However, Asif stressed that no decision would be taken until Adheeb received parliamentary approval to become the country’s new tourism minister – a decision requiring him to step down from holding the chamber of commerce’s presidency.

Should parliamentary backing be obtained for Adheeb to succeed Dr Mariyam Zulfa as the nation’s tourism head, Asif was quoted as saying that a general meeting would then be held to find a new MNCCI head.


Business as usual for Maldives travel industry despite ash disrupting flights in Europe

European flight services to and from the Maldives have not been impacted by the release of volcanic ash from Iceland into the local atmosphere with business continuing as normal today, according to staff at Male’ International Airport.

The BBC reported that some 700 flights had been cancelled across Germany today over safety concerns concerning a buildup of ash in parts of European airspace that originated from Iceland’s Grimsvotn volcano.  The report added that the situation is reported to already been returning to normal.

Last April, an eruption from Iceland’s Eyjafjallajokull volcano created a thick cloud of volcanic ash that grounded days of flights across Europe and Scandinavia. The ash impacted a number of the world’s leading airlines and their services to the Maldives, leaving tourists stranded in the country for days in some cases.

However, officials at Male’ International Airport said that the latest volcanic eruption occurring in Iceland this week had not at present had any severe impacts on arrival or departure schedules at the airport – claims that were shared by a number of airlines.

Speaking to Minivan News a spokesperson for British Airways, which operates  direct flights from London to the Maldives, said the airline had experienced only a minor number of interruptions to its flights on certain services to Scotland and parts of northern Germany.

“At present we have not been made aware of any potentially significant impacts [from the ash] on our flight schedules,” the spokesperson added.

Darrell Soertsz, District Manager for Emirates’ operations in the Maldives, said services between Europe and the Maldives had similarly been untroubled.

“So far things have been operating normally and we certainly hope to keep things that way,” he said.

Tourism Minister Dr Mariyam Zulfa said she had not been fully informed of the exact impacts of travel disruptions, if any, to the country’s tourism industry.

Dr Zulfa added that the industry had suffered last year following difficulties with volcanic ash in European airspace. Nonetheless she said it was her belief that tourism in the country was strong enough to overcome any possible difficulties that could result from the latest eruption.

“Any possible flight disruptions will of course have an impact on tourism,” she said. “Overall [last year’s] eruptions were a major hassle for the country. However, as is always the case, resort operators and other members of the industry will work together to find solutions and these solutions will be found.”

Speaking to Minivan News last year whilst the Eyjafjallajokull volcano eruption bought European Airspace to a standstill, ‘Sim’ Mohamed Ibrahim of the Maldives Association of Tourism Industry (MATI) said the cancellation of flights highlighted the vulnerability of the country’s tourism industry to outside forces.

Sim said the most important thing to note from the situation was “how vulnerable and dependent we are on external influences” and how much “incidents that we can’t control” affect the industry.

He claimed that the eruptions had not been such a huge problem for resorts at the time, but noted people were not happy about the developments that left passengers stranded in the Maldives as well as all over the world. “Obviously, we are doing the best we can. The situation is very difficult to manage.”

Sim said although some resorts had taken the flight cancellations “very seriously and responsibly,” others did not do as much as they could to ensure their guests were kept as “happy and comfortable” as possible under the circumstances.

“There is very little we can do,” he said at the time. “There is no way anyone can leave or come [to the country].”


MATATO calls for reviews of resort security

Bolstering security at the lucrative island resorts scattered across the Maldives poses an urgent challenge for government and industry amidst growing national and international crime, the Maldives Association of Travel Agents and Tour operators (MATATO) has claimed.

Mohamed Maleeh Jamal, Secretary General for MATATO, said today that despite a relatively low number of security breaches at the country’s resorts, wider societal issues such as gang crime, piracy and terrorism needed to be hastily addressed by tourism operators and authorities.

The concerns echoed recent comments made to the media by Dr Mariyam Zulfa, Maldivian Minister for Tourism, Arts and Culture, over fears that rising levels of national crime are beginning to impact the country’s secluded resort business. The tourism industry has this year witnessed a number of isolated criminal incidents at the country’s resorts culminating last week in an attempted robbery at Baros Island Resort and Spa, and the death of one of the attackers.

The Tourism Minister said that while the industry had been working to be proactive in recent weeks to outline new measures alongside police and private companies that are designed to strengthen security against a number of potential “internal and external” threats, the recent robberies and reported presence of piracy in Maldivian waters has made addressing these issues more urgent.

Responding to the Tourism Minister’s concerns, Jamal said that the entire industry would need to face up to addressing preparatory measures for resort security as it outlines a fourth tourism master plan that will cover the tourist sector’s work from 2012 onwards. The current masterplan is said to relate to vital initiatives to develop the country’s travel industry from 2007 up until this year.

“We fear there is a big challenge ahead related to security,” said Jamal.

The MATATO secretary general added that it would be vital to protect the Maldives’ main tourist selling points such as natural beaches and the peace and security afforded by a policy of providing a single resort per island.

“If we lose just one of these factors the Maldives will lose out as a destination,” he said. “We are a hospitable people and we welcome visitors with a smile and we expect record visitor numbers in the coming years.”

Jamal claimed that the full potential of an expected increase in visitor numbers could be disrupted on the back of continued reports concerning local crimes and regional issues like piracy.

The MATATO secretary general added that the security issues currently being faced were potentially a short-term challenge for the industry to overcome.

“We see the importance of collaborations with the Maldives National Defence Force (MNDF) and police to step up patrols across the country’s islands,” he said.

Jamal additionally stressed that the recent concerns were also related to wider societal issues such as drug abuse across the country inhabited islands that would reacquire a more “holistic” approach to prevent criminals from targeting resort islands, though he added that MATATO would also look to speak with property owners for their own suggestions for dealing with any possible threats.

“We are very fortunate here in the Maldives that the resorts are isolated – although there have been a number of incidents they are well managed by the resorts,” he said. “Yet 99 percent of the country is water, this creates a huge task to manage and police.”

Jamal was confident that the Maldives’ tourism industry had in the intervening decades since its inception proved to be capable to adapting in the interests of security as well as profitability; from moving towards the use of supposedly safer sea plane transportation rather than helicopters, or adopting en mass more efficient fire safety procedures in the 1990’s.

“In the past we thought that it may natural disasters that would be are biggest challenge, yet in terms of adaption, although terror threats may not be immediate, more preventative measures need to be in place,” he claimed.

Jamal claimed that despite potential concerns from the presence in neighbouring waters of Somali pirates – whose suspected presence in the Maldives has yet to lead to any attacks – the number of the threats at present facing the industry had remained limited.

Ministerial concerns

After announcing concerns to the media this week about the possible impact criminal activity could have on tourism in the Maldives, Dr Zulfa told Minivan News today that she was referring particularly to the proportional rise in crime and gang behavior in society rather than the tourism industry alone.

However, the tourism minister herself accepted that recent reports of attempted robbery at Baros and a violent theft at Kihaadhuffaru resort in January this year, as well as the potential in the future for attacks from piracy and terrorists had brought an additional sense of “urgency” to addressing security issues.

She added that extensive discussions on the issues of security and safety would form the basis of meetings scheduled between the tourism industry and security officials next month (April 6 to 7).

“The [crime] issue is of a serious concern to me, though is proportional to what happens in the country at large rather than resorts alone,” she said.

Zulfa claimed that in the interests of trying to be proactive in protecting security, the country had been “working for some time” on developing new measures to protect resorts and bolster existing security systems that are in place in the country.

The tourism minister added that ultimately, the government alone could not handle the entire burden of dealing with security challenges and that various stakeholders – from resort companies to airport operators – had so far been very cooperative in trying to ensure they were not “easy” potential targets for criminal attacks.

“As industry representatives we will all be getting together on the April 6 and 7 to have extensive discussions with police and security authorities to address these urgent issues,” she said. “Papers have been earmarked looking at a number of issues including internal and external threats as well as public safety in areas such as watersports and resort design.

Taking the example of safety, Zulfa took the example of large resorts where people might be more isolated and ensuring that mechanisms were in place to ensure guests and staff were able to be assisted efficiently and quickly.

“We are looking to be proactive and have been wanting to do this [outline amended security and safety policies] for some weeks,” she said.

Not all stakeholders within the tourism industry have shared concerns over security though.

Workers’ perspective

Maroof Zakir, Vice President of the Tourism Employees Association of Maldives (TEAM), told Minivan News that although it had not been consulted on the amendments to security in the Maldives, it had not received any complaints from its members concerning fears about safety or security.

“We haven’t had any complaints about security fears from our members, I would say this is not a big problem for resort staff at present,” he added.


Mid-market appeal amongst 2011 tourism challenges

As a growing number of Asian markets like India begin flocking to the Maldives for their holiday escapes, the country’s tourism minister believes the government’s goal of providing more middle-market beds to “compliment” premium resort properties will boost the industry in the long run.

As the country continues to look at potential revamps for how it markets itself in the tourism market, Dr Mariyam Zulfa, Minister for Tourism, Arts and Culture, told Minivan News that the Maldives risked being seen as a destination with “too many” premium beds.

However, Zulfa said that in looking to diversify towards more mid-market tourism, the issue of replacing the country’s current “Sunny Side of Life” ad slogan remained under industry consultation – including over whether it should be changed at all.

Zulfa’s comments were made as new findings published by the Pacific Asia Travel Association (PATA) and the Nielsen Company found the Maldives was among several destinations like China, Indonesia and Bangladesh to be attracting increasing interest from Indian travellers.

“The diversification in destinations indicates a greater sense of adventurism and discovery that should be heartening for tourism as a whole, and a clear symptom of a confident Indian consumer mimicking their country’s confidence and prominence,” Neilson Company Executive Director Surekha Poddar stated in the report.

“The Indian traveller is set to become a prized possession as potential spending power and disposition to travel to new countries increases.”

Zulfa said that with income levels in nations like China and India growing in general on a daily basis, the Maldives was beginning to see “exponential growth” in the number of visitors from both of these markets.

“The government has introduced a mid-market policy focusing on three to four star resorts,” she said. “These are being introduced to complement the premium beds we have here.”

Although not willing to speculate if these tourism developments were directly related, Zulfa said that more middle market properties was seen as a move that would be cater to a changing customer demographic.

“Premium beds alone are not suitable for visitors from the South of Asia. We need to look at how to reach out to them,” she said. “These tourists have very different vacation habits to more established markets like Europe.”

Slogan talks

Zulfa claimed that opinion was currently divided on the direction to take on marketing the Maldives to travellers around the world, particularly the merits of changing “the sunny side of life” slogan – one that has been in service for eleven years.

“We will be having informal discussions whilst we will be at the Internationale Tourismus Börse (ITB) – a tourism trade show being held between March 9-13 in Berlin,” she said. “Right now, we have two levels of feedback, one of which is that it [still] works.”

Zulfa added that if a decision was taken to keep the slogan, it would perhaps need to be reintegrated or redesigned with a “more modern” aesthetic.

“There is another reasoning that suggests that although the wording is OK, it is too general,” she said. “The slogan is now 11 years old and perhaps to fill the premium beds we have, a new slogan may be needed to reinvigorate the market. This will be discussed during consultations at the ITB.”

Zulfa said that work was nonetheless continuing on a Maldivian marketing strategy despite uncertainty on the final product.

Mohamed ‘Sim’ Ibrahim, Secretary General of the Maldives Association of Tourism Industry (MATI), said that MATI did not itself have an opinion on the final outcome of any possible slogan revamp. However, Ibrahim said that MATI hoped to see greater study and research into what the industry itself would prefer to see in terms of branding and marketing.

“We don’t think enough is being done, [in terms of studying the slogan issue],” he said. “We would like to see more cooperation from resorts, airlines, travel companies and other major stakeholders in the Maldives tourism industry.”

From the outset, 2011 is proving to be a year of change for Maldivian tourism, with the implementation of Tourism Goods and Services Tax (GST) on January 1 that placed an additional charge of 3.5 percent on a host of services supplied by the travel industry.

Mohamed said that although he believed that adoption of the GST among service operators had gone “smoothly”, MATI held “serious issues” with the tax related to payments and other technical issues.

The MATI secretary general said he was unable to provide more details about the concerns at present, but added that the association was looking to hold a meeting with resort chains over the issues.

Zulfa claimed that the implementation of the GST had so far gone well for the industry, with no major complaints received concerning the charges.

“Most operators in the tourism industry agree that the 3.5 percent GST is a very reasonable amount to pay,” she said.

“This is a way that more people can equitably benefit from tourism.”


New tourism slogan remains elusive despite news report

“Value for Money” will not be replacing “The Sunny Side of Life” as the slogan to entice holidaymakers from all over the world to come to the Maldives, with a final decision yet to be made on the future direction for promoting the nation’s central economic income source, the country’s Tourism Minister has said.

The Maldives National Broadcasting Corporation (MNBC) yesterday reported that the “Value for Money” slogan had been settled on in order to reflect a changing focus in enticing travellers to the Maldives by targeting a more middle-income audience.

However, while the new tourism slogan to replace “The Sunny Side of Life” is expected to focus on “value”, Minister for Tourism, Arts and Culture, Dr Mariyam Zulfa claimed that news of the slogan had been “reported incorrectly” during an address to 200 Italian journalists.

Speaking to the journalists at Male’ International Airport as part of a visit to celebrate ongoing support from the country’s travel market, Zulfa said that she believed her comments had been taken out of context.

“I said we will probably go towards a slogan reflecting a value for money product,” she added.

Zulfa said that she “didn’t think any final decision on a slogan had been made,” and that any eventual agreement would involve “lots of meetings” with stakeholders such as the Maldives Tourism Promotion Board (MTPB) before a final decision is announced.

When contacted by Minivan News, a spokesperson for MNBC claimed that the report had been based on comments made by the Tourism Minister to one of the company’s journalists.

In a statement, the Maldives Tourism Promotion Board (MTPB) said that the reports had been incorrect, but added it would be announcing a new slogan in the next few weeks.

“However, we can confirm today that the new slogan will not be ‘Value for Money’,” the promotion board stated.

Echoing the Tourism Minister’s statements, the MTPB added that it remained in discussions with as wide a group of tourism industry stakeholders as possible in attempts to better serve the market.

“The Minister has made it explicitly clear that the new slogan will be designed so that it appeals to a wide range of potential tourists; including those with high incomes as well as tourists seeking a more affordable holiday in the Maldives,” the MTPB added.