Policy outlines duty exemptions for strategic economic activities

A new policy outlining procedures for granting exemptions on import duties, royalties and revenue fees for economically significant activities has been published.

Under discretionary powers vested in the President, regulations specifying eligible activities, special circumstances and businesses, as well as administrative procedures for implementation, were gazetted on Sunday.

According to the Policy on Determining Activities, Special Circumstances, and Businesses Eligible for Exemption of Import Duty, Royalty, and Revenue Fee issued by the President’s Office, the President may grant full or partial exemptions for goods imported to initiate, implement and operate activities considered economically beneficial to the Maldives.

The policy also allows exemptions for goods imported for public benefit at national or regional level during special circumstances, and for goods imported, exported or re-exported for strategic economic projects or businesses considered important to the country.

For economically significant activities, the policy states that exemptions may apply to capital equipment, spare parts, materials and other required supplies.

The policy identifies several categories of eligible economic activities. These include materials imported for boat building and vessel repair and maintenance within the Maldives, agricultural inputs imported by small and medium enterprises, and activities expected to reduce imports and increase exports.

Other eligible activities include materials imported by commercial fishers, initiatives aimed at developing the fisheries sector, activities that expand core industries, increase trade and employment, and businesses that generate foreign currency inflows.

The policy also covers new economic sectors not currently established in the Maldives, activities intended to diversify the economy, and initiatives supporting the expansion of small and medium enterprises, including government-funded projects, loans or grants.

In the tourism sector, exemptions may be granted for new investments, as well as capital expenditure and renovation works for existing projects where costs exceed 25 per cent of the original investment value. The policy also includes marine fuel imported and re-exported by licensed Maldivian businesses for bunkering foreign vessels.

Materials imported for resort development in atolls with lower tourism activity are also eligible. These atolls are Haa Alifu, Haa Dhaalu, Shaviyani, Thaa, Laamu and Addu. In addition, materials imported by investors for the development of Halal tourism resorts are included.

The policy defines the scope and duration of exemptions and states that any agreement entered into by a state institution containing provisions on such exemptions must be submitted to and approved by the President’s Office.

Under regulations issued by the Ministry of Economic Development and Trade, applications for exemptions on duty, royalty or revenue fees may be submitted by entities registered under the Business Registration Act, local councils and state institutions.