New regulation issued on import duty waivers

President Abdulla Yameen has issued a new regulation for businesses seeking to waive import duties on a variety of capital goods and has waived duties on some goods imported to address “special circumstances.”

The revised Maldives Import Export Act gives the president the authority to waive import duties for “items imported to commence, undertake and operate activities that are beneficial to the Maldivian economy.”

According to the new regulation, businesses seeking the duty waiver should fit on the following criteria:

  • Businesses seeking to increase Maldives’ exports and reduce imports.
  • Businesses introducing a new technology
  • Economic activities which will increase living standards and employment opportunities.
  • Increase foreign currency revenues
  • Diversify the Maldivian economy.
  • Encourage small and medium sized enterprises.

The decree states that such imports can only be expensive machinery, capital equipment, infrastructure material, aircrafts and aircraft spares. The total value of items imported must be above US$2million. Duty can be waived for a period between 3 to 15 years depending on the investment of the business.

Depending on the business sector, companies seeking duty exemption should request the waiver from either the economic development ministry, the tourism ministry or the fisheries ministry. The waiver must be requested 14 days before the goods arrive in the country.

President Yameen also waived import duties for goods used in special circumstances.

These are:

  • Goods imported treat people during an epidemic.
  • Goods imported to address a decline in living standards or food supplies because of a failure to provide education, healthcare, electricity, water, sewerage and other such basic services.
  • Goods imported to address the impact of a natural disaster.
  • Goods imported on free aid to provide basic services, infrastructure development and environmental conservation projects.
  • Goods given as gifts or free aid to the people of the Maldives or to a specific island.

Goods brought under special circumstances do not need to provide the 14 day notice.


Exports decline 48 percent in October, but revenue rises

The Maldives Customs Service has revealed that exports in October decreased by 48 percent compared to the same period last year.

While MVR131.3 million worth of goods were exported in October 2014 – compared to MVR251.3 million in October 2013 – revenue collected grew by 8 percent.

“The main reason for this reduction is largely due to the fact that export of frozen skipjack and frozen yellowfin tuna decreased by a large extent this October when compared to the same period last year,” reads a statement from customs.

“Total revenue collected during October 2014 has increased by 8% compared to the same period last year. A total of MVR170.8 million was collected as customs duty and other charges this October while this figure stood at MVR158.3 million for the same period last year.”

Imports meanwhile increased four percent in October compared to the same period last year.

“Looking at the distribution of imports in October 2014, fuel was the most imported item with a CIF [Cost, insurance, and freight] value of MVR625.7 million which accounts for 23% of the total imports for the period. This is followed by food items and machinery and electronics with CIF value of MVR508.1 million (19%) and MVR444.2 million (17%) respectively.”


Revenue collected by customs increased 17 percent in first quarter

Total revenue of the Maldives Customs Service (MCS) in the first quarter of 2014 increased 17 percent compared to the same period the previous year.

The MCS revealed yesterday that a total of MVR424.9 million worth of custom duties and other charges – fees and fines – was collected in the first quarter this year while MVR363.3 million was collected in the first quarter of 2013.

“The total CIF [cost, insurance and freight] value of goods imported has also increased by 11 percent during 2014Q1, when compared to 2013Q1,” MCS said.

“Total imports measured MVR7.2 billion during 2014Q1, while it was MVR6.5 billion during the same period last year.”

One-third of the MVR7.2 billion worth goods imported during the first quarter represented importation of petroleum products.

“The second most imported category of goods was food items, which accounted 20 percent of total imports, followed by machinery and electronics which shared 14 percent of total imports,” MCS noted.

“Exports, on the other hand, have declined by 25 percent  during 2014Q1, compared to 2013Q1. Total FOB value of goods sold abroad valued MVR 752.5 million in 2013Q1. However, this figure decreased to MVR 562.2 million in 2014Q1. Approximately 70 percent of goods imported during 2014Q1 were sourced from 5 countries and 64 percent of goods exported from Maldives were bought by 5 countries.”


Majority of dollar receipts spent on imports: MMA assistant governor

The majority of US dollar receipts to the Maldives are spent on importing goods to the country, Maldives Monetary Authority (MMA) Assistant Governor Dr Azeema Adam said yesterday at a ceremony to launch the central bank’s first Quarterly Business Survey.

Dr Adam – who was recently named by President Abdulla Yameen as his nominee for the vacant governor’s position – reportedly said that US$1.5 billion out of the approximately US$2 billion that enters the domestic economy was used to pay for imports.

As an island nation heavily dependent on imports, the MMA’s latest balance of payments projections estimate that the country’s current account deficit will widen to US$562.5 million in 2014, which is equal to 22 percent of GDP.

As a result, explained Adam yesterday, there is a shortage of dollars in circulation. The central bank’s chief economist recommended reducing the volume of imports and increasing productivity.

“We have to find ways to keep dollars [circulating] in the economy,” she said.

Securing foreign markets for Maldivian exports was also essential for alleviating the dollar shortage, she suggested.

As a large number of foreign workers reside in the country, Adam said, their remittances added to the dollar outflow.

The business survey meanwhile showed “an increase in the level of business activity” in the fourth quarter of 2013 (Q4-2013) compared to the third quarter (Q3-2013).

“Looking ahead, businesses expect a continuation of this improvement in business activity and volume of demand in Q1-2014 as well. With regard to the labour market, respondents in all sectors, except for the transport and communication sectors, indicated an increase in employment in Q4-2013 compared to Q3-2013,” the summary of the survey results stated.

All sectors surveyed also “anticipate an increase in hiring in Q1-2014 reflecting the expected increase in business activity in this quarter.”

“Pressure on business costs, which includes all labour related costs and other input prices, increased in Q4-2013 when compared to Q3-2013. Similarly, average prices charged by businesses also increased in Q4-2013, except for those businesses in the manufacturing and transport and communication sectors, which indicated no change,” the summary read.

“Going forward, the majority of respondents expect a further increase in their business costs compared to Q4-2013. Average selling prices are also expected to increase, except for transport and communication sectors, which anticipate a decrease in their selling prices.”

A delegation from the International Monetary Fund (IMF) expressed surprise at the “resilience” of the Maldivian economy in a meeting with MPs on the parliament’s public finance committee yesterday.

“Imports are on the shelf. If you go into a shop, you’ll find a wide range of imported goods there. You see people with motor scooters and cars and smartphones. You see people going on travel. All these are available, are done, even while the level of reserves at the MMA is quite low,” observed the IMF’s resident representative Dr Koshy Mathai.

The country’s current international reserves were US$345.7million in December, equating to just over two months worth of imports.


Ambassadors warned of international restrictions if no president by November 11: Nasheed

Foreign ambassadors have warned of international restrictions on trade and financial transactions if there is no president-elect by the end of the current presidential term on November 11, former President Mohamed Nasheed said at a press briefing yesterday (October 30).

To avert such a scenario, the opposition Maldivian Democratic Party (MDP) presidential candidate suggested two solutions: the Supreme Court should review its judgment to annul the September 7 presidential election, or one of the two rival candidates should withdraw his candidacy “for the sake of the nation and Islam” ahead of the fresh polls scheduled for November 9.

“Ambassadors of foreign nations that I meet are now saying very openly that if there is no president-elect by November 11 they would have to take action under their normal rules or procedures,” Nasheed said.

A nation without an elected president is considered a dictatorship and prone to instability and unrest by the international community, he added.

Nasheed referred to financial sanctions imposed by the United States and Europe on troubled states such as Sudan and Myanmar.

If similar sanctions are imposed on the Maldives, Nasheed said the country would face difficulties in both importing essential goods, such as oil, medicine and foodstuffs, and continuing to export fish to Europe.

“If we cannot hold an election, we will be forced to conduct all business transactions overseas with cash,” he continued, as restrictions would apply to transactions through foreign financial institutions and banks.

“We are concerned because we can see Maldivians having to bear this burden. We are concerned that our rivals, even under these circumstances, are trying to stop the election and maintain the coup government,” said Nasheed.

The European Parliament in Strasbourg this week heard calls from UK MEP Charles Tannock to apply “maximum pressure”  to reverse what he described as a “judicial coup” in the Maldives.

Rival candidates only considered discussions to conclude the presidential election before November 11 after parliament “with a comfortable majority” passed the MDP’s proposal for the speaker of parliament to assume the presidency in the absence of a president-elect, Nasheed contended.

On the day parliament adopted the MDP resolution, he continued, the PPM and JP “realised that the coup government cannot be maintained even if they obstruct the election.”

“Even when we went to the Elections Commission, we all knew very clearly that it was unlikely that both rounds of the election could be held before November 11 while abiding by the Supreme Court guidelines,” Nasheed said.

Two options

Nasheed stressed that either a Supreme Court review or a candidate’s withdrawal was necessary to ensure a victor in one round to conclude the election by November 11.

As it was the Jumhooree Party that sought annulment of the September 7 election, Nasheed urged the party’s candidate Gasim Ibrahim to file a case at the apex court requesting a review of its decision.

“We are now at the mouth of a pit, on the edge of a razor blade,” said Nasheed, describing the consequences of repeated election delays.

Asked if either candidate had responded to his appeal for one of the pair to withdraw, Nasheed said he was hopeful but could not say he got “a clear answer.”

“I am certain that Gasim’s question will be, ‘why me?’ The answer is because you are the most sincere,” he said.

In lieu of a candidate dropping out of the race, Nasheed said the second option was for the Supreme Court to review its judgment and allow the second round to take place on November 9.

If none of the two scenarios came to pass, Nasheed expressed confidence of winning the election on November 9 “in one round” against the PPM and JP candidates.

“In my view, the Maldivian people’s patience has run out because of the efforts to stop the election from taking place. Fishermen can’t go fishing. People can’t leave on a holiday or for medical treatment overseas. And the campaign activists do not want in the slightest for their lives to return to normalcy,” he said.

Nasheed questioned the sincerity of the JP and PPM’s request for the Elections Commission to conclude the election before November 11 as both parties were insisting on following the Supreme Court guidelines whilst calling for Dr Waheed to remain in office.

Nasheed emerged the front-runner in the annulled September 7 election with 45.45 percent of the vote followed by Progressive Party of Maldives candidate Abdulla Yameen who polled 25.35 percent, necessitating a second round run-off.

Business tycoon Gasim narrowly missed out in a place in the run-off election with 24.07 percent of the vote and contested the results at the Supreme Court alleging widespread electoral fraud.

Meanwhile, at a press conference yesterday, JP Deputy Leader Ilham Ahmed emphatically dismissed Nasheed’s calls for Gasim to withdraw, calling instead for Nasheed to step back for the good of the nation.

“There is a fear that Islam will disappear if you [come to power]. There is a fear that there will be bloodshed here caused by introduction of other religions. There is a fear that you will sell of the nation’s assets,” he said.


Recent wheat flour imports contain gravel, worms, and lice: FDA

The Maldives Food and Drug Authority (FDA) issued a food alert today (May 27) warning that recent imports of wheat flour contain gravel, worms, and lice, reports local media.

The FDA also advised local retailers to refrain from selling contaminated wheat flour stock.

The agency has received a “number of complaints” that stones and sand were found in recently sold wheat flour.

The FDA is currently conducting tests of wheat flour storage facilities in Male’, and thus far they have determined shipment number 4500003103, produced in March 2013 and set to expire on September 2013, did not contain any of the suspected contaminants.


Imports, exports rise in first quarter of 2013

Imports to the Maldives increased by 12 percent in the first quarter of 2013 compared to the same period last year, according to the Maldives Customs Service.

Total imports in the first quarter amounted to MVR6.5 billion (US$421.5 million) compared to MVR5.8 billion (US$376 million) in 2012.

Exports meanwhile grew by 44 percent compared to the same period in 2012.  During the first three months of 2013, exports rose to MVR785 million (US$51 million) from MVR545 million (US$35 million) in Q1, 2012 .

Total revenue from import duties also increased by nine percent compared to the same period last year.


State reserves shrink to MVR 4.9 billion

State reserves have shrunk to MVR 4.9 billion (US$317769131), according to Maldives Monetary Authority (MMA) statistics as reported by local media.

This is essentially only enough for one month of imports.

Between November and December 2012 reserves dropped 14 percent, or MVR 849.7 million (US$55103761). In comparison with the start of 2012 – when the State reserve was MVR 5.3 billion (US$343709468) – January 2013 has seen an eight percent decline.

MMA statistics explain the reason for the downward slide at the end of 2012 is due to depletion of State funds in local and foreign banks, according to Haveeru.