DTIS, Volume I - Enhanced Integrated Framework (EIF)

DIRECT CONTRIBUTION TO REVENUE
In direct terms, a regressive bed tax is levied on all accommodation establishments,
resorts, hotels and safari boats. The bed tax was USD 6 per sold bed until November
2004, when it was increased to USD 8 per sold bed night. In 2004 the tourism bed tax
generated Rf. 430 million or USD 33.8 million. At the same time, the Government’s
income from lease rents of resort islands amounted to Rf. 614.5 million or USD 48.2
million. Finally, a departure tax is levied all travelers departing from Male’ International
Airport, i.e. both tourists and traveling residents/citizens. The departure tax was increased
in November 2004 from USD 10 to USD 12. On this basis the revenue from the 616,716
tourist arrivals in 2004, of which 101,161 arrived during November and December, can
be calculated at USD 6.4 million. The tourism sector therefore contributed a total of USD
88.4 million (Rf. 1,127 million) in government revenue, corresponding to 34.5 per cent of
total government revenue.
In addition, the government is directly involved in the operation of a hotel, which in 2004
generated Rf. 2.2 million (USD 170,000) in government revenue.
INDIRECT CONTRIBUTION TO REVENUE
Tourism also contributes indirectly to government revenue. In addition to the departure
tax, the Maldives Airports Company generates revenue from aircraft landing fees and
other aircraft services. In 2004 a total of Rf. 123.1 million (USD 9.7 million) was
generated, a significant proportion of which came from air charters carrying tourists.
In 2004, bank profit tax amounted to Rf. 55.1 million (USD 4.3 million). From
consultations with the different banking institutions operating in the Maldives, the DITS
team learnt that some 50-60 per cent of the banks’ business was accounted for by the
tourism sector. Consequently, it can conservatively be assumed that half of the bank
profit tax, i.e. USD 2.2 million, is generated from tourism.
In 2004, the government generated about Rf. 430 million (USD 33.8 million) in import
duty. Although tourism sector inputs are exempted from import duties in regard to new
investments and upgrading of existing facilities, a considerable proportion of the import
duties are applied to tourism sector imports. It is conservatively estimated that 25 per cent
of the import duty can be accredited to tourism, i.e. USD 8.4 million.
Finally, the government is also involved in the operation of Island Aviation Services and
Maldives In-flight Catering Services, both of which contributed a total of Rf. 32 million
(USD 2.5 million) in 2004. Again, much of this revenue could be considered to be
generated from tourism, estimated at 50 per cent or USD 1.2 million.
In summary, in 2004, international tourism in the Maldives generated directly and
indirectly a total of USD 104.2 million, corresponding to more than 40 per cent of
government revenue. This does not include the contribution of tourism to other
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