Special Economic Zones (SEZ) was touted as a key initiative under the 2013 manifesto for the current administration of President Abdullah Yameen Abdul Gayoom. The initiative made appearances in the budget in the consecutive years, after it was fast tracked and passed by the Parliament in 2014.
Surprisingly, the initiative failed to make an appearance in the state budget for next year.
State agencies are mum on this, while it is transparently apparent that in the past three years, the nation had not earned a single laari or cent from the said initiative. In spite of the many claims made by the Government when the bill was first introduced, it had failed to achieve their intended objective.
SEZ was formed under clause 92 of the Constitution, with several provisions included in it to facilitate an open environment for foreign investors to develop and run their businesses in the Maldives. The startup cost – a cool USD 150 million.
With the introduction of the law, senior Government figures claimed investors were flocking to invest in the Maldives. In 2016, in a press conference in the President’s Office, Fisheries Minister Dr. Mohamed Shainee announced multiple projects stemming from SEZ.
Any reflection of this was noticeably missing from budgets. It went to the point where the state had even failed to mention SEZ in the budget. Under this year’s budget the state had estimated revenues of MVR 500 million from SEZ, with MVR 1 billion listed for 2016.
We got nothing.
Tax reform is the core push to achieve budget growth for next year. Tax codes are to be changed, while business profit tax procedures are to be amended.
However, the budget is scant on details of how this is to be achieved, especially in comparison to the budget for 2017.
For this year, earnings were concentrated on a few elements. As such, MVR 565 million is expected as earnings from Airport Development Charge, MVR 500 million from land lease, MVR 261 as Congestion Charges, MVR 200 million from import duties for cigarettes, MVR 9 million from sale of fizzy and energy drinks, MVR 12 million from the sale of permits for taxis and pickup services as well as MVR 500 million from SEZ. This translated to MVR 592 million; a mere one-fourth of what was estimated.
Compared to this, next year’s budget is scant on the details. Perhaps this was done based on past experiences.