Twelfth Amendment to the Tourism Act

The government has proposed a twelfth amendment to the Tourism Act. The last amendment, the Eleventh Amendment, came into effect on 03 July 2022.

Why would the government propose yet another amendment to the law in less than two months since the last amendment came into effect?

On review, the current amendment bill is not aimed at introducing any new policy interventions. Instead, it aims to rectify an oversight that occurred during the stages of enacting the Eleventh Amendment – especially in relation to the levy of Green Tax.

As we know, one of the key policy changes that occurred via the Eleventh Amendment was to allow the collection of Green Tax at US 6 dollars from all tourism products except hotels and guesthouses with a bed capacity lower than 50. All hotels and guesthouses with a bed capacity lower than 50 are to pay US 3 dollars. This bifurcation of Green Tax was designed to take effect from 1 January 2023.

However, the bill that became law as the Eleventh Amendment had added these provisions in place of the then existing provisions of the law due to human error. This oversight effectively resulted in the deletion and replacement of the provisions in the law that were designed to enable the continued collection of Green Tax from the time the law was introduced to the arrival of 1 January 2023.

This was an obvious and unfortunate error that brought the collection of Green Tax in the Maldives to an abrupt halt. It is not our place to indicate the huge financial loss resulting from or tied to this error in judgment.

The central idea behind the new bill, the Twelfth Amendment, is to reinstate the lost provisions and improve upon the clarity of relevant provisions surrounding the collection of Green Tax.

When this new bill becomes law, the enabling legal framework to continue with the collection of green tax will be reintroduced. In other words, this law will allow the restarting of the collection of Green Tax at US 6 dollars (as before) from tourist resorts, tourist hotels and tourist vessels but Green Tax at US 3 dollars from tourist guesthouses irrespective of the bed capacity until the arrival of 1 January 2023.

On arrival of 1 January 2023, the Green Tax will migrate to the new regime and be divided into US 6 dollars and US 3 dollars respectively. The US 6 dollar tax will be applicable to all except guesthouses and tourist hotels under fifty beds. Those guesthouses and hotels with a bed capacity lower than fifty will be collecting US 3 dollars.

It is hoped that this intervention will address the defects of the Eleventh Amendment, plug the revenue loss, reinstate the lost provisions, and set the stage right for the regulatory authorities to recommence the imposition and collection of Green Tax in the Maldives (as before) and prepare for the segregation of the Green Tax regime come 1 January 2023.

By: MN with contributions from EAS

Photo: Courtesy of Mihaaru