The Ministry of Tourism is working on a new policy to offer tax and land rent concessions to attract investors to regions with lower demand for tourism. The move, announced by Minister of Tourism Ibrahim Faisal, aims to address the challenges of expanding tourism to more remote areas of the island nation.
Speaking to the state media, Minister Faisal highlighted that the uniform rates of taxes and land rent under current tourism laws discourage investors from targeting less-developed regions. He noted that the higher cost of operations and transportation in remote areas often results in a much longer return on investment compared to the more lucrative central regions.
Faisal explained that it typically costs USD 45 million to develop a resort, with a return on investment within seven to eight years in high-demand areas. However, this period extends significantly in remote regions, making them less attractive to potential investors.
To address these concerns, the government is working to amend tourism laws and regulations to offer incentives. “We are currently devising a policy to take investments to areas with lower demand for tourism by offering concessions on taxes and rent from facilities there. We will submit the papers to the Cabinet very soon,” Faisal stated.
The Minister also pointed to the lack of focus by successive governments on developing tourism in the North and South of the Maldives, where facilities remain limited. In addition to tax and rent concessions, the government plans to enhance connectivity to these regions through international flights and targeted investment forums.
How This Benefits the Maldives
Expanding tourism to remote regions is expected to bring significant economic and social benefits to the Maldives. By attracting investors, the government can create job opportunities, improve infrastructure, and reduce the concentration of tourism in the central regions. This would lead to a more balanced economic development and enable the North and South to contribute more significantly to the national economy. Additionally, better connectivity and equitable growth in tourism would strengthen community development and improve living standards in less-developed areas.
As the Maldives strives to diversify its tourism offerings, the policy changes could play a crucial role in unlocking the potential of its untouched regions while maintaining sustainable growth.
