Committee on Foreign Currency Bill closed off at MATI’s request

Parliament’s Public Accounts Committee meeting on Wednesday to review the Foreign Currency Bill has been closed off to the public at the request of Maldives Association for Tourism Industry (MATI).

The government-backed bill is sponsored by the ruling People’s National Congress (PNC)’s parliamentary group leader, Inguraidhoo MP Ibrahim Falah. It was accepted and forwarded to the Public Accounts Committee with the votes of 51 MPs, with just four MPs voting against it.

MATO attended the Public Accounts Committee meeting held on Wednesday to review the bill.

While opening the meeting, the Committee’s Vice Chairperson, Eydhafushi MP Ahmed Saleem announced MATI’s request to close off the meeting to the public.

Baarah MP Ibrahim Shujau proposed to close off the meeting as requested; a proposal which was backed by Hanimaadhoo MP Abdul Ghafoor Moosa.

The Committee members unanimously passed to close off the meeting as proposed.

A foreign exchange regulation that took effect on October 1 that requires tourist establishments to exchange a fixed amount of USD per tourist in local banks received pushback from tourism industry giants who argued that a fixed USD exchange requirement, regardless of room rate, duration of stay, the age of guests or special offers, is unfair to tourism establishments with varied market segments. It also disregards the fact that many of the expenses are paid in USD.

Maldives Monetary Authority (MMA) later announced the formulation of a Foreign Currency Bill. This draft bill, which was shared with tourist establishments for comment, maintained the USD 500 requirement for resorts, but also offered certain concessions in foreign currency exchange.

The final bill submitted to the Parliament on Monday gives tourist establishments the choice between exchanging the fixed amount per tourist as currently required or exchanging 20 percent of the monthly revenue.

The bill categorizes tourist establishments into two types.

Category-A tourist establishments are classified as registered resorts, integrated tourist resorts and private islands. Such establishments will need to either exchange USD 500 per tourist or 20 percent of the monthly revenue.

Meanwhile, Category-B tourist establishments are classified as registered tourist vessels, tourist hotels and tourist guesthouses. Such establishments will need to either exchange USD 25 per tourist or 20 percent of the monthly revenue.

Tourist establishments will not be required to exchange USD for tourists who spend less than 24 hours at the establishment, tourists under the age of 10 years - higher than the originally proposed two years, tourists hosted by establishments on a complimentary basis, and tourists hosted by the government.

The final bill also requires non-tourism businesses that generate over USD 15 million in annual USD revenue – lowered from the USD 20 million proposed in the draft bill - to exchange a percentage of its monthly revenue. Such businesses will also need to register with the MMA.