Government calls for immediate Tourism GST increase to 15 percent

The government has submitted a bill to parliament calling for the Tourism Goods and Services Tax (T-GST) to be increased from 8 to 15 percent, effective immediately.

The bill was submitted by Dhivehi Qaumee Party (DQP) MP Riyaz Rasheed last week on behalf of the government.

A T-GST of 3.5 percent was first pushed through parliament by the former government in 2011, with planned increases to 6 percent in 2012 and the current 8 percent in 2013.

Prior to the introduction of the T-GST, the primary sources of state income from the tourism sector included resort rents, import duties, and a flat eight dollar a night ‘bed tax’.

During the first month following the introduction of the T-GST, the government collected US$7.2 million from 800 of the newly registered 871 tax papers, a figure that revealed the Maldives had been underestimating the total size of its main industry by a factor of three.

Economic crisis

The proposal to increase the tax comes as the Maldives faces increasingly dire economic circumstances.

Finance Minister Abdulla Jihad revealed in April that the government had exhausted its annual budget for recurrent expenditure (including salaries, allowances and administration costs) in the first quarter of 2013, and announced the suspension of all development projects.

The State Bank of India’s refusal to roll over loans at the start of the year has seen central bank reserves at the Maldives Monetary Authority (MMA) “dwindle to critical levels”, as noted by the World Bank, to barely a month’s worth of imports.

The State Electric Company (STELCO) – the country’s main supplier of electricity to inhabited islands – meanwhile revealed this week that the government had failed to pay electricity bills to the tune of MVR 543 million (US$35.2 million), and warned Parliament’s Public Accounts Committee in a letter that it faced cash flow problems and an inability to roll out new projects as a result.

T-GST rise contentious

Tourism industry figures have previously warned that a sudden increase in T-GST would have an immediate effect on the industry’s bottom line, as many resorts are locked into year-long supply and pricing agreements with tour operators.

An overnight near-doubling of the tax to 15 percent would have “serious ramifications on tourism and the Maldivian economy,” warned one resort manager.

“Most wholesalers will not accept price increases mid-contract irrespective of what clauses we put in a contract, as laws within the EU prevent this. Hence, this will have to be absorbed by the resorts,” he explained.

“I am aware that many resorts are struggling financially and this may be enough to put them over the edge. It will be very difficult to attract much needed foreign investment when the government continues to give these signals,” he added. “Why hamper and reduce demand to a destination that is already struggling to attract its core and traditional markets?”

The resort manager said that it was unreasonable to expect the resort industry to foot the bill for the state’s financial irresponsibility, “considering there have been limited efforts within the government to reduce its expenses. [The proposed tax increase] is short term thinking that will lead to a major default within the Maldivian economy and industry, if this proceeds.”

“What continues is a large bureaucracy that makes it as difficult as possible for tourism to provide high end service to its guests in order to maintain our positioning [in the market],” he observed.

“What is basically required is that these slow and lethargic government departments to go through a productivity and efficiency program. Make the processes more efficient, make civil servants accountable for productivity targets, reduce the government workforce and increase the percentage of Maldivian workers in resorts,” the manager suggested.

The issue here is that the resorts will need to cut costs and increase efficiency to counteract this. This may hamper guest service, product enhancements and refurbishment, and staff benefits which is again detrimental to the industry as a whole. The Maldives is a premium destination with premium levels of service and this tax increase would hamper this positioning. The Maldivian people will need to expect cost cutting and in some aspects retrenchments.”

New tax fatwa

Prior to the submission of the government’s proposed increase to the T-GST, local media reported that the Fiqh Academy had issued a fatwa (an Islamic ruling) prohibiting the government from levying taxes of any sort except under exceptional conditions.

Announcing the Fiqh Academy’s ruling in a statement on May 22, the Islamic Ministry noted that taxation was only permitted under Islam in certain circumstances.

“Tax can be taken from citizens to fulfill their basic needs, and only up to the amount required to fulfill these needs in cases where the state does not have enough money [for this],” the statement read.

According to local media, the fatwa requires that any tax money collected be “invested fairly and according to Islamic principles”.

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Fatwas for new and emerging Islamic issues – Act on Religious Unity amendments proposed by DRP

The DRP has submitted amendments to the Act on Religious Unity for Majlis consideration. The amendments are designed to “strengthen the Shafi sect Islam in the country, strengthen the Islamic foundation of the country through Islamic education at all academic levels and to prevent Maldivians from studying religions other than Islam,” according to Dr. Afraasheem Ali, MP for Ungoofaaru and chairperson of the DRP’s religious cell.

The bill stipulates that Islam and Dhivehi shall be taught as compulsory subjects from grade 1 to 12 in the Maldives.

It criminalises any action in the Maldives school system to promote religions other than Islam and bans the teaching of those religions.

The bill also makes the Shafi sect the basis of Islam in Maldives.

The bill also calls for the establishment of an independent Fiqh Academy which would issue fatwas on new and emerging issues on Islam and on those issues where there is disagreement among scholars.

Of 72 MPs present and voting, 70 MPs supported accepting the bill for preliminary debate.

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Comment: That’s a Maldivian in the corner, losing his religion

When Ayatollah Khomeini issued his death fatwa against Salman Rushdie in February 1989 for writing the Satanic Verses, 44 out of the 45 member states of the Islamic Congress (1989) condemned the ruling of the Ayatollah as un-Islamic.

Many critics have pointed out that this was a fact ‘the West’ chose to ignore in its rush to present the Ayatollah’s ruling as representative of Islam’s ‘true nature’ as a religion of intolerance.

It appears the ruling is one that the purveyors of ‘true Islam’ in the Maldives – members of the Wahhabi sect – have similarly chosen to ignore by calling for the beheading of a Maldivian journalist who dares express views contrary to their own. We are told to listen to these voices as ‘true Islam’ while turning a blind eye and a deaf ear to the actions and policies of organisations such as the Islamic Conference which recently made it clear that it:

Condemn[s] the audacity of those who are not qualified in issuing religious rulings (fatwa), thereby flouting the tenets and pillars of the religion and the well-established schools of jurisprudence.

The fact that there are now people within the Maldivian society who feel comfortable enough in their own rightness, righteousness and ‘learnedness’ to flout the teachings of Islam in its name by calling for the beheading of a fellow man for his views clearly demonstrates the extent of human intolerance Maldivian society has come to tolerate in the name of religion.

Anyone who does not agree with this particular brand of Islam is now being denied, among other fundamental rights, their right to exist. The only Muslims who will be tolerated in this society are those that follow Wahhabism.

Ironically, this is a kind of practice that the first Commander-in-Chief of the ‘War on Terror’, George Bush, found rather suited to his own policies – he denied members of al-Qaeda the right to be Muslims by doggedly and repeatedly describing them as ersatz Muslims who had ‘hijacked the religion of Islam’; and by pursuing policies that, in turn, validated all such claims.

In defining Islam according to his version of it (‘Muslims are doctors, lawyers, law professors, members of the military, entrepreneurs, shopkeepers, Moms and Dads’) Bush denied the self-proclaimed ‘holy warriors’ the very religion in the name of which they were sacrificing themselves. In so doing, he effectively removed any justifications of their cause, at once turning them into ‘Evildoers’ with no motive and no cause other than Evil, pure and simple.

It is this very practice that followers of Wahhabism in the Maldives are engaging in – by making their beliefs the only ‘true Islam’, they are denying a large section of the Maldivian society their right to be Muslims; and in so doing, are removing the right of many a Maldivian to be treated as equal citizens with the same rights as those who do not practise the same brand of Islam as theirs.

By re-defining what it means to be a Maldivian Muslim they are rendering those who do not conform to their teachings irrelevant to society. Non-followers of Wahhabism are being re-cast as non-citizens, and non-Muslims. Furthermore, they are being made non-human by calling on laws of the jungle, rather than the law of the land, to be applied to them. They become beasts whose heads have to be cut off, a beastly scourge the rest of society should be cleansed of. No longer Dhivehin, no longer Muslims. And no longer human.

The discourse of the ‘War on Terror’ worked in precisely the same manner in successfully rendering ‘detainees’ or ‘enemy combatants’ (not to be recognised as prisoners of war, lest there be any rights) in Guantanamo Bay and Abu Ghraib into non-human ‘Evil’ entities with no place in civilisation. As Godless, faithless, non-human creatures outside of legality itself, they could be kept in indefinite detention without trial, abused, tortured and then abandoned.

This is what the followers of Wahhabism are doing to the Maldivian society. Rendering a part of it Godless, faithless and non-human. Their removal from society if they do not conform to Wahhabism thus becomes not just justifiable, but necessary.

Soon, there will be no Maldivian left who does not follow the brand of Islam that they advocate, not because everyone has willingly followed where they previously refused to tread, but because Wahhabism would have become the only definition of what it means to be a Maldivian Muslim.

If – and it is a big ‘if’, given the obfuscation and vacillation of official policy – this is not the future that the Maldivian government has envisioned for the country whose democracy the current President fought so valiantly for, then it should act soon to provide room for the freedom to grow of the Maldivian Muslims who do not follow this brand of Islam.

Let people know – or at least open up the channels through which people can find out – that Wahhabism cannot lay claim to ‘true Islam’ any more than Bush can deny bin Laden and his followers the right to call themselves Muslims; and that there is nothing even remotely like a consensus in the Islamic world regarding the supremacy of the Wahhabi teachings over and above others in the religion of Islam.

If pluralism is the government policy, then make it possible for people to see, and provide the opportunity for them to understand, the pluralism that exists within Islam itself. Expose people to the other side of the debate, let other voices resonate with equal vigour in the various venues and lecture halls the Wahhabis are so effectively frequenting.

The followers of Wahhabism have a captive audience in the Maldives because they are the only act in town, because their script is emotive, and because they have chosen ignorance as the stage to act out their drama. Let the audience develop some discernment, and it will become possible to, at the very least, ensure Maldivians make an informed choice if and when they decide to take this country into a future of being an Islamic State with Sharia as its only law.

Let the Wahhabis know that the government will not let itself or Islam, the religion that it has written into the Constitution, be used as instruments of power in establishing the supremacy of one particular brand of Islam in the Maldives.

Equally important is to stop allowing Wahhabism to (re)define into non-existence a substantial part of the Maldivian population that makes this nation Maldives.

Munirah Moosa is a journalism and international relations graduate. She is currently engaged in research into the ‘radicalisation’ of Muslim communities and its impact on international security.

All comment pieces are the sole view of the author and do not reflect the editorial policy of Minivan News. If you would like to write an opinion piece, please send proposals to [email protected]

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