Nasheed Warns Foreign Tour Operators Could Harm Maldives Through Regulatory Lobbying

MDP Chairperson and former President Mohamed Nasheed has stated that foreign tour operators view the mandatory registration with the Maldives Inland Revenue Authority (MIRA) as a violation of international trade principles that will harm the tourism industry. He noted that these operators warn the move risks the Maldives being excluded from the SWIFT payment system and describe it as a political project aimed at dismantling the country's established tourism model.

Speaking at a press conference held by the MDP on Wednesday, President Nasheed stated that requiring foreign operators—who maintain no physical offices, staff, or assets within the Maldives—to register with MIRA is a measure that exceeds the country's jurisdiction. He further noted that this move contradicts international taxation principles and the standards established by the OECD.

Furthermore, he noted that this contradicts the "General Agreement on Trade in Services," which guarantees the freedom to provide cross-border services without the requirement of a local establishment.

President Nasheed further stated that foreign operators view the requirements to maintain local representatives in the Maldives and the mandate for monthly tax filings as a burden that exceeds the scope of the parent GST Act. He also noted a high likelihood that these operators will seek a judicial review against the regulations, and potentially escalate the matter to the World Trade Organization (WTO) through the European Commission and their respective national governments.

Highlighting the severity of the issue, he warned that if foreign operators were to lobby through their respective national financial regulators, the Maldives could face the risk of being disconnected from the SWIFT international payment system. He emphasized that such a development would result in catastrophic consequences for the country.

At the same time, Nasheed noted that international operators in European countries are advocating the view that these regulations are not merely financial measures. Instead, they perceive them as part of a broader political project aimed at fundamentally altering the Maldives' tourism model and intellectually reshaping the industry.

"It is highly likely that foreign operators will lobby the European Commission and their respective governments to raise this issue within WTO forums. By lobbying financial regulators in their home countries, these foreign operators could inflict significant damage on the Maldives. They could lobby to disconnect the Maldives from the SWIFT network; there are established protocols for disconnecting from SWIFT when international standards are violated. If the SWIFT system is disconnected, the resulting damage to the Maldives would be immense," President Nasheed stated.

President Nasheed noted that, alongside these developments, numerous international operators have raised a highly sensitive issue.

Beyond legal and financial arguments, foreign operators are also highlighting the ideological motivations behind these regulations. The current administration has characterized mainstream tourism as "haram" (forbidden). Over the past few years, government officials have openly advocated for the development of halal tourism and introduced policies reflecting this agenda. Consequently, foreign operators contend that the requirement to register with MIRA (Maldives Inland Revenue Authority) should be viewed as more than just a mechanism for foreign exchange collection.

President Nasheed

Furthermore, President Nasheed stated that international operators view this as a deliberate attempt to reshape the tourism industry along ideological lines, potentially disrupting the existing sector.

Foreign operators lobbying in European capitals are highlighting that this regulation is not a neutral financial measure. Instead, they characterize it as an overtly political project that disrupts the Maldives' traditional tourism model and poses a threat to international operations and consumer interests.

President Nasheed

Consequently, he stated that the mandatory registration with MIRA and the requirement to exchange 40 percent of foreign currency earnings pose a significant challenge to the Maldivian economy, as well as to national security and stability.