Maldives slaps Airport Development Charge on INIA passengers

Lawmakers pictured during a parliament sitting. PHOTO/PARLIAMENT SECRETARIAT

Lawmakers pictured during a parliament sitting. PHOTO/PARLIAMENT SECRETARIAT

The Maldives parliament late Thursday approved the bill to impose an Airport Development Charge (ADC) of USD 12 and USD 25 from locals and foreigners respectively that depart from Ibrahim Nasir International Airport (INIA).

The bill on taxes and fees to be charged from airports in the Maldives was presented by member of ruling Progressive Party of Maldives (PPM) and Gahdhoo MP Ahmed Rasheed. It was approved with a majority of 48 votes from 68 members present in the sitting, while 20 lawmakers voted against and one remained null.

Controversial bill sparks heated quarrel among PPM lawmakers

The bill originally proposed to impose an ADC of USD 25 from all passengers that depart from INIA. The parliamentary economic committee had approved the bill without any alterations, which had sparked a heated debate among PPM’s parliamentary group members.

A number of prominent PPM members had heavily criticised the committee’s chair and Dhangethi MP Ilham Ahmed for not altering the original proposal. While some members had vehemently opposed charging ADC from locals, others had been ready to approve every notion of the government.

Mihaaru understands that the majority of PPM lawmakers had been inclined towards charging an ADC of USD 12 from locals, with some parliamentarians having discussed the government lobbied bill at great length with some top state officials.

The amendment to slash ADC for locals from USD 25 to USD 12 was proposed by Maafannu Medhu MP Asma Rasheed. The amendment was approved with a majority of 48 votes in favour, while 18 lawmakers voted against and two remained neutral. The economic committee which reviewed the amendment passed it with six out of ten members voting in favour.

Asma told Mihaaru late Thursday that President Abdulla Yameen Abdul Gayoom had made the decision to reduce ADC charged from locals after the concerns of PPM members were shared with him.

“This wasn’t the work of any member. It wouldn’t have been possible had President Yameen not given a decrease upon the members’ request.”

Opposition proposes several amendments

Lawmakers of the opposition Maldivian Democratic Party (MDP) and Jumhooree Party had opposed the bill, describing it as a sudden attempt to further debilitate the local people.

MDP had submitted an amendment to reduce the amount charged as ADC and not impose it on locals. They also proposed to postpone bringing the bill into effect by six months as well as change the tax from US Dollars to Maldivian Rufiyaa. However, the amendments had been thrown out with votes from government aligned lawmakers.

Changes to be expected with ADC

As the government already takes an Airport Service Charge of USD 25 from foreign passengers and USD 12 from local passengers departing from INIA, the total amount to be charged with ADC will increase to USD 24 from locals and USD 50 from foreigners.

According to the bill, only passengers with Diplomatic Immunity will be exempted from ADC. Meanwhile, persons exempted from Airport Service Charge are passengers with Diplomatic Immunity, transit passengers and those under the age of two years.

ADC will come into effect in INIA four months after its implementation.

The bill states that the airlines of the passengers bear the responsibility of collecting ADC. The airlines will be penalised under the tax act should they fail to pay the ADC to Maldives Inland Revenue Authority (MIRA).

While the government has passed to charge ADC 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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