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Maldives: Budget Must Be Cut-down If No Revenue Boost, Finance Minister Says
Source: http://www.haveeru.com.mv
Source Date: Sunday, December 15, 2013
Country: Maldives
Created: Dec 17, 2013

Finance Minister Abdulla Jihad on Sunday said the state must cut-down the budget for next year if the proposed new measures to boost revenue are not implemented.

The revisions made to next year’s budget by the new government include lease extension of resorts for another 50 years and collecting the rent as a lump sum.

Government has also proposed to increase TGST and introduce bed tax from next January.

The new measures will see the state boost revenue by MVR1.4 billion.

However, based on the comments and views of top tourism sector officials it will be a difficult task for the government to extend the lease on resorts and collect the rent as a lump sum.

Maldives Association for Tourism Industry (MATI) secretary general Ahmed Nazeer had told the parliamentary budget review committee that 90 percent of resort operators will not agree to pay the rent of 50 years as a lump sum.

Nazeer had spoken in favour of charging bed tax without increasing TGST.

The finance minister had told the committee on Sunday that the only way for the state to boost revenue was through the tourism sector. Jihad added that resort owners should not be aggrieved by the increase of TGST as the tax would be borne directly by the tourists visiting the Maldives.

“The main revenue generator is tourism. From where else can we generate extra revenue? I don’t believe that we are presently charging taxes that are too high for the tourism sector. If revenue cannot be increased we have to cut down the budget. There is no other alternative,” Jihad explained.

According to Jihad, the budget of MVR17.5 billion for next year was already too high. In that regard, the minister pointed out that no salary increments had been included in the budget as half of state revenue is spent on salaries of state employees.

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