Tuesday
30th Apr 2024
Dhivehi Edition
President Ibrahim
Fact Check: No Basis for Saying 2 Billion MVR Lost Due to Decline in Indian Tourists
Former President Ibrahim Mohamed Solih speaks at an event for parliamentary candidates from MDP. | Photo: MDP
Speaking at a campaign event for the MDP candidates contesting the Galolhu North and South constituencies yesterday, former President Ibrahim Mohamed Solih said the country has lost 2 billion MVR in reveue due to the decline in tourist arrivals from India.
The number of tourists from India has decreased by 20,000 compared to last year, former President Ibrahim said, adding that the entire economy and all Maldivians are being adversely affected.
The tourism industry suffered a loss of $58 million in the past month, while other related sectors suffered a loss of more than $68 million, he said. The total loss to the economy is supposedly $126 million or 1.9 billion MVR, according to him.
If such a major slowdown occurs in the main industry of the Maldivian economy, the biggest adverse impact will be on taxes. Since many businesses in Maldives depend on the tourism industry, a major shock to the industry will affect business income and taxes paid to the government.
The Maldives Inland Revenue Authority (MIRA) has released its financial statements for the past two months. In January 2023, the total revenue of MIRA was 3.4 billion MVR. In January this year, the figure stood at 3.5 billion MVR. Therefore, the revenue of the MIRA has increased by 5.7 per cent.
In February, the revenue situation improved further. The revenue collection stood at 2.33 billion MVR in February this year. In February last year, MIRA collected 1.72 billion MVR. Therefore, total revenue increased by 33.7 percent, compared to February last year.
In addition, foreign exchange earnings stood at $100.34 million in February this year. In February last year, it was $73.60 million.
With the positive change in revenue in February, the state collected 22.3 per cent more than the estimated amount in February this year.
In addition to this was the direct tourism revenue in February. Tourism Goods and Services Tax (TGST) collection stood at 1.1 billion MVR in February this year. This is in comparison to the lower amount of 856 million in February last year. Therefore, TGST collection in February this year increased by 40 per cent compared to the previous year.
Another tax directly related to tourism is the green tax. Green tax collection stood at 91.8 million MVR in February last year. This increased to 102 million MVR in February this year. Therefore, green tax revenue increased by 12 percent this year.
Separately, business income tax collection stood at 182.2 billion MVR in February last year. This is compared to an increase to 246.3 million in February this year. Therefore, business income taxes increased by 35.1 percent in February this year.
There are two points that are clear from these statistics. If you look at the month of February alone, direct revenue from tourism has increased. Although some businesses in Maldives have been affected by the slowdown in tourism, for the most part, businesses’ income had increased in February and their income tax payments increased.
In addition, the revenue received in the first two months of this year exceeded the estimated revenue based on the previous year's financial statements.
Given these facts, the former President’s claim that the country’s economy has suffered a huge loss of close to 2 billion MVR in the last two months due to the decline in tourist arrivals from India has no truth whatsoever, the financial figures confirm that the claim is an exaggeration.