Minister of Tourism Dr. Abdulla Mausoom has stated that the government is assisting investors who have been unable to complete the development of resorts by providing leeway in paying fines.
Speaking to PSM News, Minister Mausoom said that restructuring fines will allow them to complete the development of resorts, which would benefit the local communities. The previous regulations mandated that investors failing to pay leases for islands or land plots designated for resort, hotel, or guesthouse development would incur a penalty of 0.5% for each day of non-payment. The law has faced criticism from authorities due to the exorbitant fines it incurs for non-payment.
The government reduced the penalty to 0.0493% in 2020 as part of the efforts to help businesses during the COVID-19 pandemic. As such, Minister Mausoom said that the government is signing new agreements with investors after restructuring fines and formulating new payment schedules. He said that it would pave the way for more resorts to be developed and lead to economic growth.
Additionally, Minister Mausoom said that the government only reduced the penalty for non-payment of leases and did not waive any fines. He also said that the government did not reduce fines for resorts that have already been developed.
The Supreme Court of the Maldives has deemed the penalty for non-payment of leases as unreasonable. The government clarified that this law was put in place prior to the introduction of the tax system. The decision to lower the penalty aims to boost the country's economic outlook. In addition, during the pandemic, the government offered a waiver on six months of lease payments and facilitated access to loans for businesses.