The government is looking to establish and regulate a Tourism Trust Fund under the Tourism Act instead of the Finance Act. The proposed amendment, submitted to parliament by Ahmed Riyaz (PNC), MP for Thimarafushi constituency, outlines several changes aimed at improving the regulation and development of the Maldives’ tourism sector.
In addition to establishing the Tourism Trust Fund, the amendment proposes changes to the process for designating islands, lagoons, and land for tourism development through the cross-subsidy model. It also introduces adjustments to the timeline for construction projects and includes a provision for the temporary closure of tourist establishments undergoing redevelopment.
Under the proposed amendment, the President will gain authority to designate uninhabited islands and lagoons for tourism development, provided they fall under the jurisdiction of local councils. However, the respective island council will retain the right to allocate land on the island for tourism development.
The amendment also introduces regulations for the temporary closure of tourist establishments seeking upgrades or redevelopment. Establishments undergoing redevelopment would be required to revise their lease agreements in accordance with regulations set by the Ministry of Tourism and Environment. The amendment further grants the Ministry the authority to penalise establishments that fail to complete redevelopment work within the agreed timeframe, with the option to cancel the lease agreement without compensation.
The proposed Tourism Trust Fund will serve multiple purposes, including providing financial assistance to the tourism sector, managing such assistance in good faith, and enhancing the development of tourism facilities. Deposits into the fund will be invested in accordance with legal requirements, with contributions coming from local and foreign sponsorships, corporate social responsibility contributions from tourism operators, and investment returns.
Once the amendment is enacted, the new Tourism Trust Fund will replace the Tourism Industry Trust Fund, which currently operates under the Finance Act. A dedicated management committee will be formed to oversee the new fund, consisting of representatives from associations registered with the Ministry of Tourism and the Ministry of Finance. The composition and procedures of this committee will be detailed in subsequent regulations.
