Govt proposes bill to extend resort lease fee concessions

The government has proposed an amendment to the Tourism Act to extend the lease fee concessions for resorts, aiming to generate foreign exchange for the state.

The bill was introduced in Parliament on Tuesday by PNC MP Ahmed Riyaz on behalf of the government. It was debated during the session without a scheduled date for further discussions. The bill is expected to be debated and voted on in Wednesday's sitting.

The key amendment in the bill includes an extension of the fee reduction for resort lease extensions. In August, the government reduced the lease extension fee, with the concession period expiring on 29 February.

The proposed amendment seeks to reintroduce the reduced fees for another six months from the date of enactment. Resort operators who opt for an extension within this period will receive a fee reduction of approximately 50%.

Under the current law, a lease extension of up to 49 years requires a payment of $10 million, while shorter extensions require a payment of $200,000 per year.

The proposed amendments include:

These fees can be increased if paid in a lump sum, as per the existing law.

The previous administration of President Ibrahim Mohamed Solih had reduced resort lease extension fees for a period of two years.

The bill also includes an amendment granting the President the authority to designate areas within desert villages and forests under the jurisdiction of local councils for tourism development.

According to Article 4b) of the Tourism Act, the President has the power to determine areas for tourism development. However, in residential islands, councils retain the authority to allocate land for tourism purposes in line with the island's infrastructure plan. This provision remains unchanged in the proposed bill.

There was no previous legal provision regarding the designation of lagoons and islands under council jurisdiction for tourism development. Under the Decentralisation Act, if an uninhabited island under a council’s jurisdiction is developed for tourism, it will be removed from the council’s jurisdiction.