MATI calls for govt talks over tourism tax, forex changes

The Maldives Association of Tourism Industry (MATI) has called for further discussions with the government over recent changes requiring taxation of services provided by overseas travel agents and tour operators and the conversion of 40 per cent of resort foreign currency revenue through banks.

MATI Chairman Hussain Afeef, also known as Champa Afeef, urged industry stakeholders to raise their concerns directly with relevant government authorities rather than immediately resorting to legal action.

The amendments include the application of 17 per cent GST, under the destination principle, to services provided by overseas booking platforms, travel agents and tour operators from next month.

The foreign exchange law has also been amended to require resorts to convert 40 per cent of their dollar revenue through banks.

Both measures have raised concerns among tourism industry operators.

Speaking during an online meeting with MATI members on Tuesday, Afeef said the association would facilitate meetings between resorts, travel agents and relevant government agencies so that industry concerns could be discussed.

He said MATI would also take part in those meetings if members requested its involvement.

Afeef said the association had been raising concerns over the legal changes with relevant authorities from the outset.

On the 40 per cent foreign exchange conversion requirement, Afeef said resort operators had offered to open their financial records for review to demonstrate the impact of the measure.

“We said we are prepared to open our accounts and books. Come and see what will happen if 40 per cent is converted, what happens when we have excess Maldivian rufiyaa, and what happens to imports,” he said.

Afeef said resorts spend about 80 per cent of their revenue on operations and investment-related costs.

“Our accounts will show that after these expenses, only a very small portion of dollar revenue remains,” he said. “About 80 per cent of the revenue is spent on those two areas.”

Afeef said he had personally invited the relevant minister and officials from the Maldives Inland Revenue Authority to review the sector’s financial records, but said no officials had yet done so.

Several members who participated in the meeting also raised concerns about the introduction of the 17 per cent tax on overseas travel agents and tour operators, warning that it could affect tourist arrivals to the Maldives.

One participant referred to previous concerns raised when the green tax was increased, saying changes introduced close to the tourism high season had previously affected arrival patterns.

Members also said the recent legal amendments had been introduced quickly and that some aspects remained unclear. They called on the government to consider delaying implementation while the concerns were addressed.

MATI said concerns raised by resorts and tour operators had already been shared with relevant authorities and that it would continue discussions aimed at finding solutions.

The association said the issues would also be raised during a meeting with the Tourism Minister on Wednesday.

President Dr Mohamed Muizzu has defended the 40 per cent foreign currency conversion requirement.

Speaking at a ceremony on August 31 to ratify the legislation, Muizzu said the measure had been introduced after detailed analysis and would not create difficulties for resorts.

“This change was introduced after a thorough study. It was not something done without consideration. Qualified technical experts carried out the work,” he said.

The President said the decision was based on data and maintained that resorts would be able to comply with the requirement without affecting loan repayments, staff salaries or operational expenses.

“I want to say with confidence that resorts will not face any difficulty in converting 40 per cent,” Muizzu said. “It will not create problems in repaying loans taken to develop resorts, paying staff salaries or meeting operational expenses. That is certain.”