Former Finance Minister Ahmed Inaz has confirmed his decision to leave the Maldivian Democratic Party (MDP).
Inaz did not give a reason for his decision, but told local newspaper Haveeru that the move “puts an end to my political career for now”.
In a response to Minivan News, he said he would “always remain independent and serving the national interest”.
Inaz was appointed after the then-opposition majority parliament unseated Finance Minister Ali Hashim in November 2010, along with six other cabinet ministers.
That vote came after three weeks of disruption in parliament, a stalemate ended only when MPs of the ruling Maldivian Democratic Party (MDP) boycotted the sitting before voting began.
Inaz’s resignation followed an incident in December 2011 in which MDP activists “dragged” him from a car in which he had been spotted hold holding a covert meeting with former president Gayoom’s half brother, MP Abdulla Yameen.
MDP activist Ibrahim ‘Dhonbeli’ Haleem told Minivan News afterwards that he had observed Inaz and Yameen holding a discussion “for two hours” near Male’s South Harbor, “a dark area poorly lit that is only really frequented by boys and girls, not for official business.”
“I told Inaz it was wrong, that Yameen is an enemy and why is he going to this area to hold a business meeting. If he needs to discuss business he should do it in his office.
“Inaz admitted it was wrong, and the MDP activists were yelling and shouting so I took him on my bike to Haruge (MDP headquarters),” claimed Dhonbeli.
Inaz would not confirm that this was the reason for his resignation at the time.
Tax advocate
Inaz’s term as finance minister was characterised by swiftly-enacted tax reforms, passed amid juggling many conflicting political interests and a campaign to sell the concept to the public.
Inaz noticeably took the time to meet with businessmen, parliament and opposition party delegations to explain the reasons and rationales for the various reforms he was implementing.
“All the businessmen I have met – all the reasonable businessmen I have met – believe that the country has to move to a much more structured, predictable and more coherent system of governance. And to do that we need an economic system that supports social change, and supports the change we have brought politically,” he told Minivan News, in an interview in May 2011, shortly after becoming minister.
“To sustain their businesses it is important that they have social and political stability. It would be a grave mistake if one stands up and says they don’t support [income tax], because that will bring instability to the country and harm businesses,” he said.
Under Inaz, the Maldives implemented a tourism goods and services tax (TGST), general GST and business profit tax, and was working towards an income tax for those earning over Rf 30,000 (US$2000) a month. Nasheed’s government maintained that combined, these elements would give a full picture of the money and assets in the country, and avoid the hiding of company tax revenue with individuals.
New Economic Minister Ahmed Mohamed announced at a press conference yesterday that policy of income tax would temporarily be halted, according a report in Haveeru.
Under Inaz, the Maldives Inland Revenue Authority (MIRA) also took over most of the Maldives’ government’s cash handling, greatly reducing petty counter-level corruption across the public sector and giving a single picture of government income.
Inaz also pushed – against subtle but solid opposition – for the rufiya to be used as legal tender for all transactions in the Maldives, aside from tax collection.
Most resorts continue to charge tourists in dollars, a practice which is contrary to monetary policy and technically illegal, but ignored by the Maldives Monetary Authority (MMA). Those dollars swiftly leave the country for more financially-stable shores, instead of generating a demand for the local currency at the point of sale. The country consequently has a dollar shortage, banks have little money to loan, and the average population benefits little from the tourism industry beyond employment – for which they are paid in rufiya.
“What other country has prices in another country’s currency?” Inaz asked Minivan News, in May 2011.
A key moment under Inaz’s term as finance minister came with the discovery that based on income from the TSGT, the tourism economy was 300-400 percent previous estimates.
“Previously we had thought tourism receipts for the country were around US$700 million. But since collection of the 3.5 percent Tourism GST it has come to light that the figure is around US$2.5-3 billion,” then President Nasheed said during a press conference in June 2011.
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