The Government has proposed an amendment to the Maldives Tourism Act to establish a new Tourism Trust Fund, replacing the existing fund currently operated under the Public Finance Act.

The amendment, proposed by Thimarafushi MP Ahmed Riyaz on behalf of the Government, seeks to strengthen financial support for the tourism sector, regulate land allocation for resort development, and introduce stricter guidelines for redevelopment projects.

Under the proposed amendment, a Tourism Trust Fund will be created to provide financial assistance to the tourism industry through a transparent policy framework. The fund will invest in tourism development projects, with all financial contributions managed according to legally approved regulations.

Once enacted, the current trust fund under the Public Finance Act will be abolished, and all funds will be transferred to the new Tourism Trust Fund.

The Tourism Trust Fund will be financed through sponsorship funds obtained by the Ministry of Tourism and Environment, contributions from the tourism industry as part of their corporate social responsibility (CSR), returns on investments, and other financial contributions collected by the the Ministry.

A dedicated committee, comprising representatives from the Ministry of Tourism and the Ministry of Finance, will oversee the fund. Regulations governing its formation and management will be outlined under the Maldives Tourism Act to ensure transparency and accountability.

At present, the Tourism Act grants island and city councils the authority to draft tourism plans and lease islands and lagoons within their jurisdiction for tourism development. The proposed amendment would grant the President the authority to determine which islands and lagoons may be leased. This amendment specifically revises Article 5 of the Tourism Act.

Additionally, the bill introduces a provision concerning land designated for tourism under cross-subsidy schemes, an economic policy framework designed to generate broader national benefits. 

The bill also proposes modifications to the payment structure for resort lease extensions. Under the current provisions of the Tourism Act, resort operators are required to pay USD 100,000 per extended year, with an increase to USD 200,000 per year if payments are not made within six months.

The proposed amendments introduce the following updated payment structure for lease extensions:

The bill further introduces amendments concerning redevelopment procedures for tourism establishments. Under the proposed regulations, any redevelopment of a leased resort must be carried out in accordance with revised lease agreements and Tourism Ministry regulations. Additionally, should a redeveloped property fail to reopen within the stipulated timeframe, the Tourism Ministry will be authorised to void the lease agreement.

The proposed bill, representing the 15th amendment to the Maldives Tourism Act, was the primary agenda item during Tuesday’s parliamentary sitting.

This marks the third set of amendments to the Tourism Act proposed by the current Administration. Previously, the Government introduced amendments aimed at increasing tax revenue from the tourism sector. These included doubling the Green Tax, raising the Tourism Goods and Services Tax (TGST), and increasing the Departure Tax to generate additional funds for national development.