The government has rejected allegations that the tourism industry was not consulted before changes were made to foreign exchange requirements for resorts, saying representatives of the Maldives Association of Tourism Industry (MATI) took part in discussions with senior officials before the amendments were ratified.
In a statement issued on September 6, the President’s Office disputed an article published by Dhauru News earlier in the day which accused Chief Government Spokesperson Mohamed Hussain Shareef of making a false claim about consultations surrounding the new foreign exchange framework.
The dispute centres on the government’s decision to require Category A tourism establishments to exchange 40 percent of their monthly gross sales through the official banking system, replacing the previous option that allowed establishments to exchange USD 500 per tourist.
Category B tourism establishments are meanwhile required to exchange either USD 25 per tourist arrival or 20 percent of monthly gross sales.
President Dr Mohamed Muizzu ratified the first amendment to the Foreign Exchange Act on August 31, with the revised provisions taking effect from September 1.
Dhauru’s article, published under a headline accusing the Chief Government Spokesperson of telling a “blatant lie,” challenged his assertion that the 40 percent requirement had been introduced following research and consultation with the tourism industry. The article also characterised the government’s decision as having come as a surprise to the sector.
The President’s Office said those claims were incorrect.
According to the government, the proposed changes and wider financial reforms were discussed with MATI on multiple occasions, while separate discussions were also held with individuals in the association’s leadership.
The President’s Office pointed specifically to a meeting held on August 23, eight days before the amendments were ratified, as evidence that senior tourism industry representatives had been consulted.
The meeting brought together senior officials responsible for economic, financial, legal, tourism and monetary policy.
Government representatives included Homeland Security, Labour and Technology Minister Ali Ihusaan, Finance and Public Enterprises Minister Hassan Zareer, Economic Development, Transport and Trade Minister Mohamed Saeed, Attorney General Ahmed Usham, Tourism and Civil Aviation Minister Mohamed Ameen and Maldives Monetary Authority Governor Ahmed Munawwar.
Six senior representatives from MATI attended the discussions, according to the President’s Office. They included the association’s Vice Chairman, Secretary General and Deputy Secretary General.
The government also cited a statement issued by MATI on August 24, which it said independently confirms that the association’s senior leadership participated in the August 23 consultation.
On that basis, the President’s Office said it was inaccurate to claim that MATI had not been consulted or that the changes had been introduced without the tourism industry’s prior knowledge.
Foreign exchange rules underwent major revision
The disagreement comes amid significant changes to the Maldives’ foreign exchange framework as the government seeks to increase the amount of foreign currency entering the formal banking system.
Tourism generates the majority of the country’s foreign currency earnings, while the Maldives depends heavily on imports that must largely be paid for in foreign currencies, particularly US dollars.
Under the earlier framework, resorts could meet their mandatory conversion requirement by exchanging either USD 500 per tourist or a percentage of their revenue. The latest amendment removes the per-tourist option for Category A establishments and instead requires them to exchange 40 percent of monthly gross sales.
President Muizzu has previously defended the revised requirement, saying the decision was based on extensive statistical, academic and technical assessments and would not prevent resorts from meeting their operational obligations.
The President has argued that increasing foreign currency conversion through official channels is necessary to improve access to dollars for essential imports and other domestic requirements.
The changes have nevertheless attracted significant attention from tourism businesses because of the sector’s central role in generating foreign currency and the financial obligations resorts have in both domestic and overseas markets.
The President’s Office said its latest statement was issued to clarify the consultation process after questions were raised in the media.
It maintained that the Chief Government Spokesperson’s comments regarding consultation with tourism stakeholders were supported by the meetings held before the law was amended and rejected the allegation that he had misrepresented the process.
