Former President Abdulla Yameen has called on resorts to oppose the recent legislative changes mandating the conversion of 40 percent of their foreign currency earnings into local currency.
Speaking at a People's National Front (PNF) rally held in Fuvahmulah, Yameen urged resorts to reject the requirement and continue highlighting that such a burden is unsustainable for the industry.
"Every single resort. All resorts. This is not just about MATI [Maldives Association of Tourism Industry]. Individual resorts must have the courage to say they do not accept this [the 40 percent conversion requirement]. They must state clearly that they cannot bear this burden," Yameen said.
Yameen characterized the move to force resorts to convert a significant portion of their revenue through legislative amendments as an authoritarian measure.
He noted that resort operators had previously indicated that any conversion requirement exceeding 10 percent would cause difficulties. He emphasized that since resorts must repay their development loans in US dollars, being forced to convert a large portion of their earnings would jeopardize their financial stability.
"President Muizzu should know this. If he doesn't, the MMA Governor, who is a key figure in these financial matters, certainly should. He served under me as well. They must realize that even if they pass such things into law, they are simply adopting an authoritarian approach," Yameen said.
"The tourism industry had already advised during consultations that anything above 10 percent would be problematic. Resorts are entities that operate with high dollar expenditures. They cannot repay the loans taken to build these resorts in Maldivian Rufiyaa."
Last week, Parliament passed amendments to the Foreign Exchange Act, requiring tourism businesses that earn less than $25 million annually to convert 40 percent of their foreign currency revenue. A change to 'Category C' businesses under the law was the upward revision of the threshold for this requirement from $15 million to $25 million in annual revenue.
The government maintains that these legislative changes and stricter enforcement measures will eliminate the dollar black market and resolve the current foreign exchange shortage. However, opposition figures and economic experts warn that these measures could exacerbate the country's dollar crisis.
