Tag: finance ministry

MP allowance debacle “not a mix-up”: State Finance Minister

The Finance Ministry today rejected implications that yesterday’s release and recall of the controversial Rf20,000-a-month committee allowances against a court injunction was a mistake which had caused confusion in the government.

“I don’t think it’s a mix-up,” said State Minister of Finance Ahmed Assad today. Assad was unclear about the court injunction.

“Releasing that sort of money is not a big procedure, I think this is just people trying to follow the general rules and experiencing an administrative error,” he said.

Assad didn’t believe anyone deserved blame, and said that “if anything, it is the ministry at large that was at fault.”

Local daily Haveeru yesterday reported that the allowances had been issued “by mistake.”

Finance Minister Ahmed Inaz had not responded to Minivan inquiries at time of press.

The court injunction, which was issued on September 26, ordered the Finance Ministry not to release funds for the committee allowance until the court rules on a case filed on behalf of a civil servant, contending that the allowance could not be given before deducted amounts from civil servants salaries were paid back.

The injunction has since been appealed by the Attorney General’s Office at the High Court, which is due to hold a first hearing on Sunday.

Parliamentary privileges

Meanwhile parliament yesterday debated a motion without notice proposed by Vilufushi MP Riyaz Rasheed claiming that a civic action campaign launched by concerned citizens in late August violated MPs’ special privileges.

MDP MP Ahmed Easa told Minivan News yesterday that colleagues had said the allowance was being released to the parliament secretariat, but he was told that it had been held back by the Minister of Finance.

“I don’t think there was any wording, anything in what the court said indicating that they couldn’t release the money,” said Easa. “But no money has been going in to my account today, I can tell you that.”

Easa elaborated on the allowance, saying that the amount of staffing support and allowances other government branches received justified MPs accepting the proposed allowance.

“The MP point of view is that some of the independent wages and allowances are greater than MPs. The MPs are expected to do research and other duties, but we don’t have an office, a supporting staff, a phone allowance, a travel stipend to visit constituents or other things to support our work. Seven percent of our salary is taken out for a pension fund, and Male’ is an expensive place to live,” said Easa.

Easa said he will accept the allowance, but pointed out that he had always objected to it in parliament on the grounds that all payrolls should be streamlined.

“But if these other government groups are taking an allowance, why not the MPs? This is a democracy, so I always respect the majority decision.”

Lawyer Mohamed Shafaz Wajeeh, one of two lawyers involved in the civil case, argued that the number of people benefiting from the allowance does not justify the sum released, which amounts to Rf18 million (US$1.1 million).

“It’s greed. Just greed,” Shafaz said. “MPs and higher-ups in the government are probably more aware of their own power than they should be. The thinking behind this goes against everything we know.”

Shafaz suggested the government consider other options, such as releasing the allowance in installments to lighten the burden on the state budget and other subsidiaries.

“But I’m not sure how much political will there is to do this. Everyone says the allowance is a good idea.”

Civil society

Although members of the civil sector earlier issued a statement objecting to the allowance, which they called “a gross injustice to the Maldivian people,” they have not articulated an official position on the issue of late.

Maldives Democracy Network (MDN) Director Fathimath Ibrahim Didi said that individuals in the organization were involved at the beginning, but that they did not represent MDN.

“Now, I think there may be a group working against the allowance, but it is loosely formed involving people from NGOs, lawyers and individuals,” she said.

Transparency Director Ilham Mohamed told Minivan News that a volunteer team was addressing the matter, but that large protests had not been organized among local non-government organizations (NGOs).

“I believe there may be sporadic gatherings in different places,” said Mohamed. “I do know that the NGOs that were involved in the original statement opposing the MP allowance are unified on this issue.”

“Symbolic”

The decision to approve the Rf20,000 (US$1200) monthly allowances in December 2010 was met with  protests and widespread public indignation. However in June this year, parliament rejected a resolution proposed by opposition Dhivehi Rayyithunge Party (DRP) MP Ahmed Mahlouf to scrap the allowance.

Meanwhile the current civic action campaign was prompted by parliament’s Public Accounts Committee (PAC) deciding in late August to to issue a lump sum of Rf140,000 (US$9,000) as committee allowance back pay for January through July this year.

Article 102 of the constitution states that parliament shall determine the salaries and allowances of the President, Vice President, cabinet ministers, members of parliament, members of the Judiciary, and members of the independent institutions.

The Rf20,000 allowance was initially approved on December 28, 2010 as part of a revised pay scheme recommended by the PAC.

During yesterday’s debate on a privileges motion regarding the anti-committee allowance campaign, MP ‘Colonel’ Mohamed Nasheed, a member of the PAC, explained that the committee felt that MPs should earn a higher salary than High Court judges.

“But even then the honourable members of the Public Accounts Committee believed that MPs were receiving a sufficiently large salary in relation to the country’s economic situation,” he said, adding that a decision was made to institute a “symbolic” committee allowance.

“The thinking at the time was to give it to MPs who attend committee meetings as a very symbolic thing, for example one laari or 15 laari. But to ensure that take-home pay for MPs would be Rf82,500,” he said.

However, he continued, this “noble effort” became politicised and the subject of “an anti-campaign programme.”

Colonel called for legal action against the activists “when they go beyond the boundaries of free expression” and the right to protest, claiming that MPs’ families and children had been targeted.

Echoing a claim made by a number of MPs yesterday, Colonel said none of his constituents had asked him to decline the allowance.

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Finance Minister condemns Public Accounts Committee Chair

Finance Minister Ahmed Inaz has said that the Rf456,000 (US$31,000) issued to Maldives Media Association (MMA) according to the Finance Report sent by the ministry to parliament was actually issued to Maldives Media Council (MMC) and not to the dissolved NGO MMA.

”It was technically a typing error, we sent the Public Accounts Committee a report consisting information about some of the recent transactions, and the Public Accounts Committee’s Chair MP Ahmed Nazim [who is also the Deputy Speaker of the Parliament] asked us to send detailed information of all the transactions mentioned in the report,” Inaz explained.

He said the ministry then sent the committee details of the transactions in the report, which still had the typing error uncorrected.

”We did not identify that error, and after we sent the details, the chair of the committee told the media that we have used Rf456,000 from the contingency budget to pay salaries of MMA staff,” he said. ”Actually it was used to pay the salaries of MMC staff.”

Inaz said he regretted that Nazim had not verified the typing error with the ministry before going to the media.

”We send the report to the parliament to cooperate with them and to assist them in making us accountable, I attended the committee three days in a row this week and we do not have a policy of withholding information,” he said, adding that he condemned Nazim’s actions and hoped that he would not repeat such things in the future.

”I also apologize to MMA members, but the responsibility goes to the Chair of the Public Accounts Committee as well,” Inaz said. ”Things like this make the ministry lose the confidence we have in the Chair of the committee.”

Nazim told local media this week that a report submitted by the Finance Ministry showed that over Rf450,000 from the state budget was issued to the MMA.

In the wake of the revelation, the Maldives Journalists Association (MJA) and senior members of the now-defunct Maldives Media Association (MMA) called on the Auditor General and Anti-Corruption Commission (ACC) to investigate the alleged Rf456,000  released from the state’s contingency budget.

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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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Civil Court issues injunction against releasing funds for MPs’ committee allowance

The Civil Court last night issued a temporary injunction ordering the Finance Ministry not to release funds to parliament for MPs’ committee allowance until the court rules on a case filed on behalf of a civil servant, contending that the allowance could not be given before deducted amounts from civil servants salaries were paid back.

A group of concerned citizens protesting the committee allowance filed the case on behalf of Maah Jabeen, Seenu Maradhoo Fenzeemaage, arguing that releasing funds for committee allowance without reimbursing civil servants violated constitutional provisions on fairness and equal treatment.

The committee allowance was approved on December 29, 2010 while wage cuts were enforced in October 2009.

In January 2010, the Civil Service Commission’s (CSC) decided to reverse the pay cuts, sparking an ongoing legal dispute between the commission and the Finance Ministry.

At the height of the dispute last year, permanent secretaries of line ministries were ordered to submit different wage sheets by the commission and the ministry.

Speaking to Minivan News after Judge Hathif Hilmy granted the injunction last night, lawyer Mohamed Shafaz explained that the case was based on article 43 of the constitution, which states that everyone has the right to fair and just administrative action, “by which we take to mean that constitutional provisions in articles 17 and 20 relating to equality and non-discrimination would be infringed of a civil servant if the Ministry of Finance chooses to release the funds for committee allowance to the People’s Majlis before the deducted amounts from the salaries of civil servants is paid to them.”

“Our argument was based on the principle of judicial review,” he continued. “For judicial review to be used in a case in the Maldives is relatively rare and this is I would say a novel case. Our idea is that anyone vested with legal powers must act within the limits of the constitution.”

Delivering the ruling on the request for a temporary injunction, the judge said that releasing the funds before the court issues a final judgment on the case “could cause irreversible damage to the plaintiff” and ordered the Finance Ministry not to take any action that could “defeat the purpose of the claim.”

While the state attorney insisted that neither the Finance Ministry nor the President’s Office has made a decision on releasing the funds, the claimants submitted video footage of President Mohamed Nasheed telling protestors that the executive could not overrule parliament’s decision without threatening separation of powers.

In April 2010, the Civil Court ruled that Finance Ministry did not have the legal authority to overrule the CSC. Although the government contested the ruling and refused to restore salaries to previous levels, the High Court upheld the lower court ruling in May this year.

The state attorney also argued that the case should not have been accepted by the Civil Court as the government has appealed the High Court verdict at the Supreme Court. The judge however ruled last night that the state could not produce documentation proving that the Supreme Court has decided to hear the appeal.

Attorney General Abdulla Muiz confirmed today that the AG office has appealed last night’s lower court decision at the High Court.

Shafaz meanwhile observed that “the ruling [yesterday] affirms that the court recognises that there is an issue here that needs to be rectified or subject to the system of justice.”

“It is also significant because by granting the temporary injunction the court has accepted and taken on an active role for implementing judicial review in the Maldives,” he said. “So this opens up the possibility for each and every action of the executive branch of the government, or the parliament or any other part of the state, to be challenged in the courts.”

Yesterday’s temporary injunction was also significant because “it was based on infringement of the rights of an individual,” Shafaz continued, adding that it was “a case where the act of a minister of the executive could infringe upon the rights of an individual.”

The favoured outcome for the group of concerned citizens would meanwhile be “for the court to recognise that giving parliamentarians their committee allowance before the deducted salary is given would be an infringement of the rights of a civil servant, or civil servants, under the constitution.”

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Finance Ministry appeals for cooperation with cost-cutting measures

The Finance Ministry has appealed for cooperation from all state institutions to the government’s cost-cutting measures by not hiring additional staff, creating new posts or replacing vacancies.

A budget circular issued by the ministry on Sunday notes that expenditure on state employees accounts for 35 percent of government spending in the 2011 budget while 49 percent of government expenditure so far this year (excluding foreign loans and free aid) was on salaries and allowances.

“Lately a number of institutions have been requesting permission from the ministry to add new posts in 2011 and hire employees for vacant posts,” reads the circular signed by Finance Minister Ahmed Inaz. “However since the ministry believes that, considering the state of the budget, there is no space to add employees or fill vacant posts this year, the ministry urges cooperation for controlling the number of employees.”

As part of the government’s belt-tightening measures to curb expenditure, the circular notes, the Finance Ministry requires offices and state institutions to seek authorisation in writing for capital expenditure and overseas trips as well as repair and maintenance work.

The ministry had previously informed all state institutions to not create new posts or fill vacancies, the circular noted.

“In addition, posts of employees who leave their government jobs under the ministry’s “voluntary redundancy programme” has been abolished,” it added. “The ministry believes that as a result of this programme expenditure on employees out of the state budget will be controlled to an extent.”

The Finance Ministry recently revealed that the country’s fiscal deficit in 2011 reached Rf1.3 billion (US$84 million) in the first week of September.

The circular meanwhile noted that the government has pledged not to raise nominal wages until the end of 2012 under the staff-level agreement with the International Monetary Fund (IMF).

In May, the IMF gave preliminary approval for a three year economic programme in the Maldives, after the government agreed to “a package of policy reforms that will help stabilise and strengthen the Maldives’ economy.”

“In sum, this package of proposed policy reforms will help stabilize and strengthen Maldives’s economy, and the mission thus reached a staff-level agreement with the Maldivian authorities on a three-year economic program that could be supported by a new IMF lending arrangement,” reads an IMF press statement in May. “The agreement reached, however, remains subject to review by IMF management and approval of the IMF’s Executive Board, which could consider a program request from Maldives in July. It is anticipated that an approved program would encourage key donors to contribute additional financial support.”

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Details of government spending and revenue made public

Government expenditure outstripped revenue by 20 percent between January 1 and September 8, 2011, according to the first of weekly expenditure statements made public by the Ministry of Finance and Treasury yesterday.

While government income reached Rf6.3 billion (US$408.6 million) at the end of last week, government spending however stood at Rf7.5 billion (US$486.4 million), resulting in a fiscal deficit of Rf1.3 billion (US$84 million) financed by loans and sale of Treasury bills.

In addition to Rf3.2 billion (US$207.5 million) spent on salaries and allowances for state employees – the single largest source of expenditure – Rf2.4 billion (US$155.6 million) was needed to cover recurrent expenditure or administrative costs.

Capital expenditure was meanwhile Rf1.2 billion (US$77.8 million) while spending on debt service or debt repayment reached Rf563 million (US$36.5 million).

President Nasheed announced at a ceremony held in August to unveil the government’s ‘Fiscal and Economic Reform Programme’ that the government would publicise details of expenditure on a weekly basis.

In December 2010, parliament approved a Rf12.37 billion (US$802 million) annual state budget with a projected revenue of Rf8.8 billion (US$570.7 million) and recurrent expenditure of Rf9.8 billion (US$635.6 million) – 49 percent of which was to be spent on salaries and allowances.

Recurrent expenditure was expected to be 79 percent of government spending.

An additional Rf200 million (US$12.9 million) was injected to the budget in anticipation of the local councils that came into being in February this year.

Plugging the deficit

In March this year, the International Monetary Fund (IMF) warned that “significant policy slippages” have undermined the country’s ability to address the ballooning budget deficit.

“On the expenditure side, there have been no net fiscal savings from public employment restructuring, public sector wages will be restored to their September 2009 levels earlier than expected, and the new Decentralisation and Disability Bills will lead to considerable spending increases,” the IMF noted in a statement. “Also, the Business Profit Tax will come on stream eighteen months later than planned [the tax came into force on July 18, 2011].”

The IMF warned that the Maldives economy was presently unsustainable, on the back of “expansionary fiscal policies” from 2004 which left the country especially vulnerable to the decline in tourism during the 2008-2009 recession.

The country’s fiscal deficit exploded on the back of a 400 percent increase in the government’s wage bill between 2004 and 2009, with tremendous growth between 2007 and 2009. On paper, the government increased average salaries from Rf3000 (US$195) to Rf11,000 (US$713) and boosted the size of the civil service from 24,000 to 32,000 people – 11 percent of the total population of the country – doubling government spending from 35 percent of GDP to 60 percent from 2004 to 2006.

The IMF said that while it recognised “the difficult political situation facing the authorities”, “decisive and comprehensive adjustment measures” were required to stabilise the economy, allow sustainable growth and reduce poverty. In particular, it raised concern about the “lack of significant progress in public employment restructuring.”

An internal World Bank report produced for the donor conference in May 2010 meanwhile noted that increases to the salaries and allowances of government employees between 2006 and 2008 reached 66 percent, which was “by far the highest increase in compensation over a three year period to government employees of any country in the world.”

President Nasheed told delegates at the conference that the government was “committed to financial prudence and long-term stability.”

“We have scrapped the reckless policies of the past, which saw money printed to finance a growing budget deficit,” he said, adding that the government was working with “international multilateral organisations, to ensure we do not spend more than we can afford.”

On the size of the bloated civil service, Nasheed said, “In the past, the government offered people jobs not because there was work that needed doing. The government offered people jobs as bribes; to get their allegiance to a repressive regime. Almost 10 per cent of the population works for the government – a staggering amount.

“And there are more civil servants than there is work to be done. Many government employees are under worked; chained to demoralising jobs. Our administration will therefore dramatically reduce the number of civil servants. But we must provide loans for outgoing civil servants, to help them set up businesses or acquire new skills.”

In April, the government announced a programme to incentivise voluntary redundancy in the civil service.

“Political backlash”

A UNDP paper on achieving debt sustainability in the Maldives published in December 2010 meanwhile observed that former President Maumoon Abdul Gayoom responded to growing calls for democratisation in 2004 with “a substantial fiscal stimulus programme” of increased government spending, “much of which was not related to post-tsunami reconstruction efforts.”

When the impact of the worst global recession in decades struck the Maldives in September 2008, “the Maldivian economy was already in the middle of a severe economic crisis with substantial fiscal and current account deficits, high liquidity growth, double digit inflation, pressure on the fixed exchange rate, increases in public and private sector debt, rising inequalities between the capital and the atolls, and a costly civil service.”

However the new government’s efforts to reduce government spending with pay cuts of up to 20 percent along with plans to downsize the civil service – which employs a third of the country’s workforce – was met with “a severe political backlash from parliament.”

“In March 2010, the parliament passed a 2010 budget with amendments which increased the government’s proposed budget by 7 percent (or 4.5 percent of GDP),” the paper noted, referring to parliament’s addition of Rf800 million (US$51 million) to the 2010 budget.

“Three quarters of this increase funded a reversal in civil service wage cuts implemented the previous year. Progress on redundancies has also been slower than expected and reforms in this area are unlikely to be completed until the end of 2011 at the earliest. This will have important fiscal consequences.”

In July, the Finance Ministry publicised details of expenditure on state employees, showing that Rf1.6 billion (US$103 million) had to be spent on salaries and allowances for 20,476 civil servants.

State wage expenditureAnnual expenditure on salaries and allowancesPercentage of total wage bill or expenditure on employees
Civil servants or employees under the executive (excluding political appointees and councillors)Rf1,596,029,00739 %
Uniformed bodiesRf1,001,489,48624 %
Political appointees in the executive branchRf99,178,9802 %
Administrative staff at the President’s OfficeRf27,326,7301 %
CouncilsRf717,250,03017 %
JudiciaryRf210,282,4635 %
People’s Majlis or legislative branchRf79,210,7182 %
Institutions dependent on state budgetsRf393,620,94310 %
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Transparency asks authorities to investigate MPs for bribery over committee allowance justifications

Transparency Maldives has strongly condemned remarks by MPs justifying their newly inflated allowances by claiming that large portions of their salaries were spent on meeting demands from constituents.

MPs from both major parties have previously admitted that a large, usually undisclosed proportion of their salaries is spent on medical treatment, education and other requests from their electorate – a symptom of an enduring culture of patronage that persists in the Maldives – and confessed that ignoring these demands in such a culture of expectation is extremely difficult.

However, “Transparency Maldives believes such actions fall under article 3 of of the anti-corruption law and article 13 of the Anti-Corruption Commission Act regarding bribery,” Transparency said. “If such acts have taken place Transparency Maldives calls upon the relevant authorities to conduct investigations and take legal measures.”

The statement notes that 16 MPs have so far informed parliament’s secretary-general that they did not wish to take the Rf 20,000 (US$1300) allowance.

Today a group of citizens concerned about parliament’s committee allowances gathered in front of the Finance Ministry and presented a petition signed by more than 1000 people to the ministry, later intercepting President Nasheed as he left the Ministry.

The President spoke with the gathered activists and was requested to sign the petition himself, but asked why he should sign a petition that was to be presented to him anyway.

President Nasheed reportedly told the group that the government had no other choice but to issue the funds for the committee allowances as it had been already approved by parliament. The Rf20,000 allowance was initially approved on December 28, 2010 as part of a pay scale recommended by parliament’s Public Accounts Committee.

Nasheed explained that it was not a matter of whether he supported the allowance, but that “when parliament makes it legally binding the government does not have any discretion [to overrule the parliament’s decision].”

Project Cordinator of Transparency Maldives Aiman Rasheed told Minivan News that the campaign against the committee allowance will continue and there was hope for success.

”Today we presented the Finance Ministry 1365 letters signed by concerned citizens and eight cabinet members, plus high-profile people across the country,” he said.

”We have made plans to continue the letter campaign and to make the citizens aware of the impacts of this committee allowance.”

MP salaries have increased 18-fold since 2004, according to a graph released by the NGO.

The committee allowance was Rf18 million, Rasheed said. ”In comparison, the budget to combat drugs is Rf 14 million, the budget subsiding the fishing industry is Rf12 million, medical services Rf18 million and the budget for small and medium businesses is Rf16 million,” he said, adding that these areas would be impacted by the increased expenditure on MPs.

Opposition Dhivehi Rayithunge Party (DRP) MP Dr Abdulla Mausoom on his Facebook page said receiving the allowance made him feel like “Robin Hood”. Responding to criticism that such a justification would taint future elections by making them unfair for political challengers, he replied that “when the President appoints ‘directors’ for paper-companies and pays millions in public money to promote MDP…. that’s very unfair too. Why don’t we see any protest on that? This is my way of ‘protest’ for irresponsible ‘politically aligned’ spending of the government.”

The government has previously contested that expenditure on the 244 political appointees in the executive branch represented only two percent of the state’s wage bill, or Rf99 million (US$6.4 million) a year, a figure DR Mausoom has previously claimed represents “the tip of the iceberg”.

“The whole country was corporatised,” he explained. “There’s a roads corporation and all sorts of corporations. The people appointed to the boards of these corporations are all purely political appointees. They were appointed directly by the President to promote a political agenda.”

Dr Mausoom told Minivan News today that the moment he received the allowance he would start spending the same amount on his constituency for social projects.

“There is no benefit for the people in keeping the money in the government’s treasury because they will spend it all on political appointees,” he said.

“The real issue is that one institution has too much power. Parliament should not have the power to set their own salaries.”

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Housing project only for Indian bids

The Finance Ministry has opened a housing project to build 500 housing units across the Maldives, but has limited bid submissions to Indian contractors, Haveeru News reports.

The Indian government allegedly offered the project, along with a US$40 million loan for its development, on the condition that only bids from Indian contractors be considered.

Haveeru News reports that contractors are required to make an initial bid deposit of US$400,000. They must register at the ministry before September 10.

A statement from the Finance Ministry allegedly said proposals must be submitted by September 26, and a pre-bid meeting will be held on September 8.

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Finance Ministry asked to sell resorts with outstanding rent payment notices

The Tourism Ministry has requested the Finance Ministry enforce a cabinet decision to recover outstanding rent and fines from seven resorts, either through further negotiation or sale of the resort properties.

Tourism Minister Dr Mariyam Zulfa confirmed to Minivan News that a letter was sent to the Finance Ministry on Tuesday, requesting that it “take the measures decided by cabinet as the period [for repayment] has expired, that is to sell the resorts or recover the amounts owed through discussions.”

As 90-day notices had been given to resorts with unpaid rent on two occasions, said Zulfa, the delays were “a bit too much.” Last month the Tourism Ministry issued “a final warning” to ten resorts to settle at least 25 percent of the amounts owed before July 25 or have their licenses revoked. Three resorts have since complied with the notice.

The Tourism Minister revealed that she had argued against revoking licenses because it would “narrow the chance” of recovering the outstanding rents.

“Also when licenses are revoked, the resort has to be closed down immediately regardless of advance bookings, guests already at the resort and employees working there,” she explained, adding that as the resorts would be sold as a going concern, it would continue to operate.

In addition, different resort businesses faced “different challenges, such as financial constraints.”

“I know that from the day we gave notice [the resort companies] have been trying to raise the money overseas,” she continued. “But we cannot give further extensions as it would not be fair to others as well.”

Zulfa observed that the notices have been “very effective”, as a number of resort facilities had complied and paid outstanding rents and fines.

“As of July 25, the government is now owed US$12.47 million,” she revealed, adding that the figure was “considerably lower” than before.

Local media reported last month that the resort facilities owed over US$20 million to the state.

Zulfa dismissed speculation in the media at the time that the resorts had been afforded special treatment as some were owned by high-profile members of the ruling Maldivian Democratic Party (MDP), including MP Ahmed Hamza and Yacht Tours owner Abdulla Jabir.

The letter to the Finance Ministry however requested measures be taken against Alidhoo and Kudarah Resorts (Yacht Tours), Giraavaru Island Resort (owned by Abdul Rauf, M. Sunrose), Kihaadhupparu Island Resort (Athamaa Marine International) and Zitali, Filitheyo and Medhufushi (owned by the family of MP Hamza and Economic Advisor to the President Ali Shiyam).

“It is just a coincidence,” said Zulfa. “My mandate is to vouch on behalf of all stakeholders regardless of which party they belong to.”

Local daily Haveeru reported today that according to the Maldives Inland Revenue Authority (MIRA), a portion of the outstanding rents and fines had been paid by the companies. However MIRA would not be withdrawing its court cases against the resorts.

Commissioner General of Taxation Yazeed Mohamed told local media last month that MIRA “will not back down” or hesitate to take legal measures against businesses with outstanding rent and fines.

Zulfa said today that the Tourism Ministry would meet MIRA officials next week to discuss the possibility of reaching out of court settlements to recover the owed amounts.

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