President ratifies bill to extend resort lease fee concessions

President Mohamed Muizzu on Wednesday ratified the 15th amendment to Tourism Act.

Parliament passed the bill on Wednesday.

The amendment revises the legal framework governing the allocation of islands, land, and lagoons for tourism development under cross-subsidy. It also modifies provisions on lease extensions, redevelopment of tourism establishments, and the establishment of a Tourism Trust Fund.

Under the amendment, land designated for tourism on inhabited islands or cities must align with the respective urban development plan. The president is authorised to designate uninhabited islands and lagoons within such jurisdictions for tourism development, restricted to tourist guesthouses and hotels. Allocations for resort development under cross-subsidy must align with government policies aimed at economic and social benefits. Lease extensions require a fee, with a maximum extension of 49 years.

The Ministry of Tourism and Environment is mandated to regulate the closure and redevelopment of tourism establishments, ensure compliance with a newly established safety and operational standards code, and oversee advertising regulations for tourist service establishments. The amendment also dissolves the Tourism Industry Trust Fund, transferring its assets to the newly established Tourism Trust Fund.

One of the key amendments 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.