DTIS, Volume I - Enhanced Integrated Framework (EIF)

TOURISM ACT
A key objective of the proposed review and update of the existing Tourism Act and
accompanying tourism related regulations is to ensure that the legislation clearly defines
the roles and functions of the key tourism stakeholders, notably the Ministry of Tourism
and Civil Aviation, the Maldives Tourism Promotion Board (MTPB) and the private
sector. In this connection it is recommended that public-private sector partnership in the
industry be strengthened, through an enhanced role of the MTPB with its own Board of
Directors drawn from the public and private sector as well as civil society, to replace the
present Advisory Council, which does not appear to be an effective body.
RESOURCES
The government should review its level of funding of such activities as monitoring and
enforcement of tourism related regulations. It is important that these functions are well
resourced. Indeed, it is recommended that an adequate proportion of the revenue that is
derived from tourism should be ploughed back into sector to ensure its sustainable
growth. Tourism currently generates directly and indirectly about 40 per cent of total
government revenue, while only some 1.5 per cent of government expenditure is spent on
tourism development. In particular, investment in tourism education, hygiene, safety, and
environmental standards as well as in market research is needed to ensure the long-term
sustainability of tourism.
It is also essential that the various types of tourism taxation or levies (e.g. bed tax and
airport departure tax as well as lease agreements for resorts) should be reviewed if a new
tax regime, including for instance, corporate tax or a value added tax (VAT), is
introduced.
Meanwhile, government should look into the possibility of making the bed tax
progressive to take into account the relative differences in investment and profit levels,
though this may be somewhat complicated and will require a system of grading or
classification of the resorts.
INTER-MINISTERIALTOURISM COORDINATION COMMITTEE
The establishment of an Inter-ministerial Tourism Coordination Committee (ITCC) will
enhance inter-ministerial coordination and cooperation relating both to the monitoring
and enforcement of tourism related regulations and standards, and relating to other issues
and subjects affecting tourism development and involving other government ministries
and departments, such as immigration and customs, transport and infrastructure, hygiene
and safety, etc. It is recommended that such an Inter-Ministerial Committee be
established at a high or deputy minister level to ensure that it approaches issues from both
policy and operational perspectives.
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