Tourism Minister Dr. Abdullah Mausoom and Maldives Monetary Authority (MMA) Governor Ali Hashim were at loggerheads over the issue of reducing rent from resorts.
The duos views on the matter came to light at a Parliament Committee hearing. The government had proposed to reduce rents to buffer the losses to resorts from implementing minimum wage.
Governor Hashim said that the world was still reeling from the continued conflict between Russia and Ukraine. Supply chain disruptions, slowed down economic growth following the pandemic, and lower number of travelers globally are still present and very real threats. As such, any motion that reduces state earnings would negatively impact the economy as a whole, the Governor said.
He added that in-depth research into the effects of the bill was needed. Such a research, Hashim said, should focus on the location and size of the islands. For this research, Maldives Inland Revenue Authority (MIRA) needed to disclose the information.
Any change to revenues, amid supply chain risks, would exacerbate current economic status.
MIRA noted that such a change would result in a loss of around MVR 500 million (US$ 32.4 million) to the state.
Tourism Minister Dr Abdullah Mausoom had argued against the Governor’s view. He said by reducing rents, resort owners would have more money to invest in other projects – what is commonly referred to as ‘trickle down economics’.
“Resort owners are the largest re-investors. [owners of properties] from Male’ atoll they have branched to other areas. So if they are given a reduction, they can use that to invest,” Dr Mausoom said.
He added that he did not view this move as a loss to the country. stressing that rents were not the only way to secure income, the Minister said this rent reduction as a revenue generator.