Maldives alters USD25 airport tax plan to charge only foreigners

Tourists pictured at Ibrahim Nasir International Airport. MIHAARU PHOTO

Tourists pictured at Ibrahim Nasir International Airport. MIHAARU PHOTO

The Maldives government hinted at amending its proposal to impose an Airport Development Charge (ADC) of USD 25 on all passengers departing from the Maldives’ main airport to only charging ADC from foreign passengers.

Implementing ADC at Ibrahim Nasir International Airport (INIA) was included in the State Budget 2017 proposed to the parliament on Tuesday by finance minister Ahmed Munawar, which is part of the government’s endeavours to increase state revenue next year. The ADC of USD 25 is expected to bring in a revenue of MVR 565.8 million in 2017.

Meanwhile, the government already takes an Airport Service Charge of USD 25 from foreign passengers and USD 12 from local passengers departing from INIA.

The government’s original proposal regarding ADC did not differentiate between local and foreign passengers, sparking harsh criticism from civilians. In the wake of public outcry over the controversial proposal, ruling Progressive Party of Maldives (PPM)’s parliamentary group leader and budget review committee’s chair Ahmed Nihan said in a tweet late Tuesday that the government’s intention is to charge ADC “only from tourists and foreigners”. However, he did not impart further details.

According to the state budget, ADC is a separate free from the airport service charge of USD 25 already charged from foreigners. Should ADC be approved by the parliament, it will increase the total tax charged from foreign passengers at INIA to USD 37.

While the government is proposing an ADC of USD 25 from next year onwards, INIA’s previous operator, GMR Group of India, had also tried to impose the same tax of USD 25 which had been promptly halted by the Civil Court. The proposed charge had sparked much controversy among the public with the majority opposing its implementation as airport development had not been completed at the time it was proposed.

The state budget also proposes depositing the revenue from ADC into the Sovereign Development Fund the government is looking to establish next year with a capital of MVR 1.1 billion.

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