Nasheed: Amendments to Tax and Foreign Exchange Laws Pose Threat to National Security

Mohamed Nasheed, Chairperson of the opposition Maldivian Democratic Party (MDP), has warned that recent legislative amendments requiring all foreign-registered travel agencies—regardless of size—to register with the Maldives Inland Revenue Authority (MIRA), coupled with the government’s new foreign exchange regulations, could pose significant risks to national security.

Speaking at a press conference held by the MDP on Wednesday, Nasheed stated that international tour operators have expressed extreme concern over the 8th amendment to the Goods and Services Tax Act, which was ratified and published on August 31, 2024.

Nasheed highlighted growing concerns regarding the new taxation policy, noting that foreign-registered travel agencies selling holiday packages are now mandated to register with MIRA, regardless of their company size. He added that these service providers are describing the timing of this regulatory change as particularly challenging.

Nasheed highlighted that tour operators establish agreements with suppliers and finalize holiday programs many months in advance. He noted that numerous Maldives packages for the upcoming European winter season have already been advertised and sold at fixed rates. He further warned that unless these issues are rectified, small-scale operators who market and sell Maldivian tourism products internationally may be forced to discontinue offering Maldives packages altogether.

All major companies operating in the tourism sector, including those that send or bring tourists to the Maldives, have been contacting us. Their concerns are significant. Both the companies and their legal counsel believe that these actions violate international taxation principles and other established treaties. Consequently, they intend to advocate within their own parliaments and governments, arguing that the measures currently being implemented by the Maldivian government breach international standards. These are highly sensitive issues for the Maldives, and such developments could pose serious risks. Every major tour operator is now expressing these concerns.

Mohamed Nasheed

Nasheed stated that these issues do not only adversely affect the Maldives' financial and economic sectors. He further noted that the government's actions have also posed significant challenges to the nation's security and stability.

Nasheed urged the government to investigate these matters and implement the necessary reforms as swiftly as possible. He warned that failure to do so would leave the future of the Maldives in a state of grave uncertainty and peril.