President ratifies forex bill requiring dollar exchange in tourism

President Mohamed Muizzu on Saturday ratified the Foreign Exchange Bill, which introduces new regulations requiring foreign exchange earners in the tourism sector to exchange a portion of their foreign currency earnings to Maldivian rufiyaa.

Parliament on passed the bill on Thursday.

Key provisions of the law include:

• Category A establishments (resorts): Resorts can either exchange $500 per tourist or 20% of their total revenue in foreign currency.
• Category B establishments (guesthouses, liveaboards, hotels): Guesthouses and other similar establishments have the option to exchange $25 per tourist or 20% of their foreign currency earnings.
• Other entities receiving significant foreign exchange: Businesses that earned at least $15 million in foreign currency over the past year must exchange 20% of their foreign exchange income.

The law includes an exemption for children under 12 years old from being counted as tourists in calculating retention obligations.

The finance committee made several changes, including provisions for concessions aimed at easing compliance. However, some stakeholders have raised concerns that the concessions may not apply uniformly across all types of resorts.

The law received written comments from four stakeholders:

• Maldives Association of Tourism and Travel Operators (MATATO)
• Maldives Monetary Authority (MMA)
• Kanifushi Investment
• Maldives Association of Tourism Industry (MATI)

MMA drafted the original bill to formalise new rules on foreign exchange transactions introduced last October.

With MMA’s regulations in October, more than 50 resorts have informed the MMA that they do not intend to comply with the rule to exchange $500 per tourist exchange without any other option. Stakeholders have expressed concerns over the feasibility and fairness of the regulation’s provisions, particularly for different categories of resorts.