The Government has submitted a bill to the Parliament to minimize the financial pressures faced by resorts following the implementation of minimum wages.
The bill was sponsored by the Central Hithadhoo Constituency Member of Parliament Ahmed Rasheed. Rasheed is a member of ruling Maldivian Democratic Party (MDP).
The purpose of the bill is threefold. Firstly, the bill seeks to adhere to market rates in determining share prices in the event shares of a jointly held resort company needs to be sold. Presently, the rates are fixed under law. Secondly, to refer to market rates and to open to market rates when leasing islands for tourism development so as to benefit councils. Third – to reduce the land lease rates so as to lessen the financial burdens stemming from implementing minimum wages.
Presently, land lease rates are between US$6 and US$750,000 for land areas less than 200,000 sq meters. Previously this figure was at US$8 and US$500,000.
The Government has proposed to set the land lease rate at US$1.1 million for land areas under 400,000 sq meters. The price point for land areas larger than 400,000 is set at US$ 1.5 million.
This proposal was met with condemnation from the opposition. Naifaru Constituency Member of Parliament and Deputy Leader of opposition Progressive Party of Maldives (PPM) Ahmed Shiyam, said that the government needed to find ways to increase earnings to the state.
Shiyam added that a study needs to be undertaken to determine the effects of minimum wage. Pointing out that market and essential goods prices had increased after minimum wage was implemented, Shiyam said citizens have not benefited from this move.