MATI Opposes Proposed Increase in Mandatory Dollar Conversion

The Maldives Association of Tourism Industry (MATI) has opposed a proposed increase in the mandatory foreign currency conversion requirement for resorts, warning that raising the requirement to 40 per cent of total sales would place an unsustainable burden on the tourism industry.

MATI reported that its Executive Board was summoned to  meet with senior Cabinet ministers and government officials at an urgent meeting at the President’s Office on Saturday, where officials raised concerns that some resort operators were allegedly contributing to the parallel foreign currency market through illegal transactions.

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The association maintained that it had no knowledge of such activity and reiterated that it has consistently urged its members to comply fully with all applicable laws and regulations.

The government subsequently held a press conference on the issue on Sunday, attended by Maldives Monetary Authority (MMA) Governor Ahmed Munawar, Homeland Security Minister Ali Ihusaan, Economic Development Minister Mohamed Saeed and Finance Minister Hassan Zareer.

According to MATI, the government cited the allegations against certain resort operators as justification for proposing to increase the mandatory conversion requirement for Category A establishments, including resorts, to 40 per cent of total sales.

MATI argued that allegations involving individual operators, which remain under investigation, should not result in a broad policy affecting the entire tourism sector. It also disputed suggestions that resort operators alone were responsible for pressure on the parallel foreign currency market.

The association explained that the MMA had earlier proposed removing the existing option requiring the conversion of USD 500 per tourist and replacing it with a uniform requirement to convert 20 per cent of total sales for Category A establishments.

MATI maintained that any mandatory conversion requirement should not exceed 10 per cent of total sales. It also called for authorities to resolve pending exemption requests from resorts that have been unable to meet the existing requirements.

The association expressed concern that the proposed requirement would double from the 20 per cent discussed earlier this month to 40 per cent of total sales.

MATI noted that resorts already make significant payments in US dollars for expenses including fuel, salaries, service charges, supplies, logistics, guest transfers, taxes, tourism land rent and foreign currency loan obligations.

The association represents 146 resorts among its 200 members and noted that the tourism industry remains one of the country’s largest sources of foreign currency earnings and conversion.

MATI reaffirmed its commitment to engaging with the government, the MMA and other stakeholders to find what it described as fair and sustainable solutions to the country’s foreign exchange challenges.