The Maldives Monetary Authority (MMA) has changed rules to force tourist facilities to change dollars at a fixed rate for every tourist visiting the country as part of measures to solve the dollar shortage problem.
The changes were brought to the Foreign Currency Regulation and Money Changing Business Regulation.
Under the changes, all transactions in Maldives must be done in Maldivian Rufiyaa. But many exceptions were given to businesses earning revenue in foreign currency:
- Money spent on payments to the government or state under a law or regulation
- Transactions with customers in connection with services provided by banks and financing companies
- Remittance service businesses and their transactions with customers
- Transactions between insurance companies for goods and services in the tourism sector
- International transactions
- Price of goods and services to tourists
- Payment in foreign currency for goods or services purchased by a business that earns foreign currency income
- Payment of dividends and transactions with shareholders by a business earning foreign currency
- Buying and selling shares of a business earning foreign currency
- Payment of salaries and allowances in foreign currency by a business that earns foreign currency income
- Price of goods and services to tourists by duty-free shops
Under the new rules, tourism businesses have been given 30 days to register with the MMA. New businesses are also required to register at the MMA within 30 days of registration at the Maldives Inland Revenue Authority (MIRA).
Additionally, MMA has imposed rules on depositing all funds with banks and reporting to the agency.
These include submitting details of goods and services provided by tourism businesses to the authority and depositing or transferring to a foreign currency account opened in a bank within a specified period. The maximum is three months.
While the rules require the total income to be deposited in banks, a certain amount has to be changed. The amount is USD 500 for each tourist visiting resorts, integrated resorts, resort hotels, hotels, tourist vessels and other such places.
The amount set for guesthouses and hotels in inhabited islands with less than 50 rooms is USD 25 per tourist.
However, tourist facilities can get an exemption from the MMA in case the foreign currency has to be used to pay taxes, repay loans or due to a court order.
Under the new rules, banks are required to sell 60 percent of their weekly foreign currency earnings to the MMA the following week. Banks are also required to submit details of all foreign exchange to the central bank.
MMA has the authority to impose a fine between MVR 10,000 and MVR 1 million on businesses and individuals who violate the rules. MMA can also impose a fine of less than MVR 5000 per day until the issue is rectified.
Although the rules have come into force, it does not prohibit anyone from carrying and keeping foreign currency.
"These regulations will increase the proportion of foreign exchange inflows into the banking system and the proportion of foreign exchange supplied by the banking system to businesses and the public," the MMA said in a statement.
