The Maldivian Democratic Party (MDP) Chairperson and former President Mohamed Nasheed revealed today that European tour operators and investors have been reaching out to express their concerns regarding the mandatory requirement for resorts to convert 40 percent of their foreign currency earnings into local currency.
Writing on X, Nasheed explained that European tour operators are concerned that the 40 percent conversion requirement leaves insufficient funds for dividends after covering operational costs and loan repayments.
"Major European tour operators and businessmen are contacting me. Their concern is that after meeting expenses and debt obligations, the 40 percent conversion mandate leaves no room for adequate dividends," Nasheed said.
Highlighting that European tour operators and businesses already pay 20 percent GST in Europe, Nasheed noted that paying additional taxes to the Maldives beyond the existing obligations to MIRA (Maldives Inland Revenue Authority) would be unsustainable.
Furthermore, Nasheed warned that failing to address these concerns from tour operators and businesses could push the Maldives to the brink of bankruptcy.
Nasheed has previously cautioned that forcing resorts to convert 40 percent of their revenue into Maldivian Rufiyaa could lead to the bankruptcy of these establishments and result in job losses for workers. He also noted that such measures undermine investor confidence.
Under the latest amendments to the Foreign Exchange Regulations, resorts and other businesses categorized under "Category A" are required to convert 40 percent of their foreign currency earnings from this month into a local bank by next month.
The Maldives Association of Tourism Industry (MATI) has previously stated that the 40 percent conversion requirement is not feasible for resorts. However, President Mohamed Muizzu maintains that the policy is achievable and was implemented following extensive research.
