US$6 green tax to be introduced from November 2015, says tourism minister

The new green tax for tourists will be introduced from November 2015 at a rate of US$6 per bed per night, Minister of Tourism Ahmed Adeeb has revealed.

Speaking at a press conference held by the cabinet’s Economic Council today, Abeeb said that guest houses would be exempt from paying the new tax in order to reduce the impact on small and medium businesses.

“Since 2013 the guest house venture has been on the rise. We do not want to hinder the development of these businesses so we have decided to exempt guest houses from paying the tax,” said Adeeb, addressing concerns raised by the opposition Maldivian Democratic Party (MDP) earlier in the day.

The introduction of the new tax is to come 11 months after the abolition of the bed-tax, which will continue to be charged at US$8 a night until the end of this month.

Some resort owners have suggested that the combination of the bed tax with the rise in T-GST to 12 percent this month has affected bookings, though Adeeb today vowed there would be no further increases in T-GST during the government’s current term.

The T-GST rise came after urging from the IMF, which has suggested that the previous rate of 8 percent was low for a tourism industry as profitable as the Maldives’.

Adeeb said today that the council does not believe the green tax will hinder the demand from tourists – especially from Europe – who will become “champions” of the Maldivian environment by paying the tax.

2013 saw a record 1.3 million tourists spend just over  7 million bed nights in the country, although the country’s macro economic stability has remained a concern.

The tourism minister has previously said that revenue generated from the new levy would be spent on resolving the waste management issues in the greater Malé region – an issue made more pressing with the Economic Council’s recent termination of the Tatwa waste management contract.

Adeeb also revealed the council’s plans to remove import duty on construction material needed for the refurbishment of resorts, thereby stimulating resort development which he said would provide numerous employment opportunities for the youth.

President Abdulla Yameen last week announced that five new resorts would begin construction in 2015 in the northern atoll of Haa Dhaalu, which currently has none in operation.

Also speaking at the press conference, Minister at the President’s Office Mohamed Hussain Shareef said  the government was seeking to begin the re-development of Ibrahim Nasir International Airport midway through next year.

“Beijing Urban Group and Maldives Airports Corporation Limited has finished the drawings of the airport and are in the process of submitting the proposal to China’s Exim bank in order to finance the project,” explained Shareef.

Shareef also re-iterated the government’s plans to start work on the proposed Malé-Hulhulé bridge in the year 2015, before opening the bridge in 2017.

“The bridge survey team is almost done with the feasibility study and it will be submitting its reports to the Chinese Government who will then finance the bridge through grant-aid and low interest loans,” said Shareef.

Agreements to develop the INIA and to promote the Malé-Hulhulé bridge were signed during Chinese President Xi Jinping’s visit to the Maldives as part of his South-Asian tour in September.

During his visit, President Xi also officially requested that the Maldives participate in China’s 21st Century Maritime Silk Route, before journeying to India as part of his tour of the region.

Shareef concluded the press conference by commenting on what the governing Progressive Party of Maldives has described as attempts by the opposition to spread misinformation regarding comments made by the foreign minister on Sino-Indian discussions about the silk road project.

After Dunya Maumoon’s comments to the Majlis last week appeared to suggest that Indian had discussed joining the project with President Xi, the Indian government released a statement strongly denying such talks had occurred.

Shareef warned the MDP – which has today announced its intention to table a no-confidence motion against the foreign minister – that it would have to answer to the international community which had been informed of its attempts to sow discord.