Criticized for wealth, yet in reality, just debtors

Back then and even now, they believe that the resources available in the Maldives can successfully be leveraged to generate revenue. This is the basis on which the pioneers of the multimillion-dollar tourism industry we see today initiated efforts to introduce tourism in the Maldives. Over 50 years later, they still remain hopeful of the future prospects of the industry. 

However, it is on the hands of the government to formulate the relevant policies, laws and regulations to strengthen the industry. The pioneers can only provide their input for the decisions made by the government and assist in the implementation of policies, laws and regulations. 

Pioneers of the tourism industry, Champa Brothers’ Chairman Mohamed Moosa (Uchu) and Champa Crown’s Chair Hussain Afeef, expressed the same sentiments in an exclusive interview. They conveyed their concerns and ideas. 

Tax revisions to lower demand for resorts 

At the end of September, the government introduced a new foreign currency regulation which prompted complaints from senior tourism industry stakeholders. 

Prominent businessmen described the regulation which mandates tourist resorts to exchange USD 500 per tourist they host as “ridiculous”. Guesthouses being mandated to exchange USD 25 per tourist they host is also a great burden on the businesses. 

With bills also submitted to double the Green Tax and raise the Airport Departure Tax and the Airport Development Fee – one should consider the impacts these changes will have on tourism. Most importantly, the impact it will have on resorts that were developed at huge cost. 

This is where Uchu’s questions begin. Why are there conflicting tax rates for tourists arriving in the same country based on where they stay? 

Uchu believes the significantly lower taxes levied from guesthouses compared to resorts coupled with the cheaper services provided at guesthouses would decrease the demand for resorts. 

“Just USD 3 is levied as Green Tax from tourists staying there (guesthouse). It is tourists that are coming to the other place (resorts) too. Same nation. USD 12 from that person,” he detailed.  

He described it indirectly encouraging tourists who wish to travel to the Maldives without necessarily going to resorts to opt for the cheaper option. 

“Henceforth, it is more likely that tourists will go for guesthouses rather than resorts. It is only sensible as this is the same nation. However, prominent figures are expected to go for high-end places. This is likely to increase,” he said. 

Nevertheless, Uchu believes the government will only come to a decision after considering the possible losses it may pose to businesses. Therefore, he said cooperating with the government as the best course of action. 

A debtor 

It is a common belief that the development of a resort is undertaken because that person has a lot of money. However, as Uchu describes, they are all debtors. 

“Very much in debt. The amount of loans withdrawn can only be inquired from institutes such as Bank of Maldives and HSBC,” he stressed, 

According to Uchu, all these funds are invested in the Maldives. In this regard, he said the revenue generated from an island that is developed by taking a loan is invested in developing additional islands. He described this as his investment policy. 

He noted that a significant sum of revenue generated from an investment by foreign investors flows out of Maldives while the revenue generated from an investment by a local investor enters local banks. 

Despite this reality, Uchu said some disgruntled individuals, without knowing the reality, criticize resort owners for being wealthy. 

Hopes for the future 

There will be certain changes to the tourism industry with these decisions. When questioned regarding the future, Uchu responded: “Who is to know what will happen tomorrow?”

On the contrary, his younger brother, Afeef emphasized the need for the government to collect the pending dues from all businesses involved in the tourism sector as the most crucial act to secure a bright future for the industry.

Afeef also recommended the development of all islands that have yet to be developed to pave the way to generate revenue from them in order to take tourism to the next level. 

“I believe the most important thing that needs to be done is collecting the debt from debtors. The unpaid tourism industry taxes, rent and other dues need to be collected. All undeveloped islands need to be developed as well,” he said. 

Both brothers are in consensus to further develop and boost the tourism industry. To walk a road that will create revenue for the Maldives. To cooperate with the government’s decisions.