Tax tourists to fund conservation efforts, suggests report

Tourists to the Maldives should pay an environmental levy to fund conservation programmes in the country, according to a report produced by the Environment Protection Agency (EPA), in collaboration with the College of Fisheries in Mangalore, India, Florida International University in Miami and the South Asian Network for Development and Environmental Economics (SANDEE).

The report, titled ‘User-based Financing of Environmental Conservation of the Maldivian Atolls’, places a monetary value on the use of natural resources for tourism, and proposes the use-tax as a means of compensating for the current “lack of political will and budgetary resources [which] appear to hinder the effective implementation of the above marine protection law.”

Tourism should fund conservation, the report suggests, as the study “found a large disparity between the amount of economic value generated from this nature-based tourism and the amount going into atoll environmental conservation.”

“Even a small tax levied on tourist expenditure on the islands or a direct conservation check-off as a user fee collected from the tourists would help defray the costs of the atoll conservation,” the report suggests.

Specific threats to the marine ecosystem – and the tourism industry – include threats to coral from development activities such as near-shore reclamation, harbor construction, dredging and other island expansion activities.

“Additionally the nutrient enrichment from sewage discharges from the resorts and nearby inhabited islands encouraging algae growth on the reef,” the report notes.

“Over-exploitation of reef fisheries also indirectly impacts the corals. Overfishing removes the herbivorous fishes and these fishes such as parrot and surgeon fishes are integral part of reef as they prevent the over growth of macro-algae on the reef as they deprive corals of essential sunlight.”

Despite the implementation of 31 marine protected areas, high demand for reef fish by resorts and seafood exporters means local fishermen continued to fish in these areas, with little funding allocated to education or enforcement.

“From inception the marine protected area program received only meager financial support from the government, and inadequate staff,” the report notes.

“In the year 2007, the entire environmental conservation program in the country received less than one percent of the Gross Domestic Product while the tourism and transportation sector together contributed about 46 percent.

“The inadequate funding of such programs seriously limits the ability of the management agencies of enforcing protected area boundaries, use restrictions, and penalties and conducting educational programs.”

The report suggests that part of the reason protected areas receive insufficient funding “is the government’s failure to recognise both market and non-market values derived from natural resources.”

“With nature-based tourism there exists a significant amount of economic surplus, which the tourists derive and which does not enter the market process. As a result, the government fails to recover at least a portion of that surplus toward the costs of protecting the resource from its users.”

Currently, visitors spend an average of US$1,666 per person per trip within the country, a total annual spend of US$1,126 million, the report noted, broken down into hotels (35%), followed by food and beverages (23%), recreational activities (19%), miscellaneous (18%) and retail shopping (5%).

If the government were to introduce a user fee of US$35, spread across these or levied at once, then based on current visitor numbers the country would generate US$27.36 million – “more than 85 percent of current environmental expenditure.”

Sim Mohamed Ibrahim from the Maldives Association Tourism Industry (MATI) counters that passing additional taxes to tourists is “not a good idea at all”, as “the Maldives is already seen as an expensive luxury destination, and unaffordable for tourists in the mid-market segment.”

“Resorts already need to apply best practice to maintain and manage natural resources to ensure they remain in business,” he said, favouring education and greater involvement between the industry and the local communities.

Resorts “could do more” to pass on best practice to the community, Sim acknowledged.

“In particular we have to catch the younger generation before they begin dropping waste in the ocean, for instance,” he said.

The report anticipates the industry’s economic counterargument, in that the main challenge faced in implementing such a conservation fee would be “political resistance from local businesses that serve the tourism industry. It is feared that excessive taxes and fees may turn tourists away to other places.”

“Ironically, Maldives’ tourism continues to expand significantly [and] users who greatly benefit from the rich natural resource are foreigners, while the responsibility for sustainable and fair use of such resources largely falls on the local population and the government,” the report reads.

“One way to resolve this disparity issue is to identify funding sources from within those who directly benefit from the tourism experience and the tourism dollars, and to design policies to ensure appropriate money transfer from beneficiaries to those responsible for conservation and regulation,” it notes.