The Maldives Inland Revenue Authority (MIRA) cannot limit its scrutiny to small corner shops; it must thoroughly audit luxury resort properties if the country is to resolve its chronic US dollar shortage, Maldives Monetary Authority (MMA) Governor Ahmed Munawwar said yesterday.
Addressing lawmakers during a Parliament Budget Committee meeting, the central bank governor revealed that whilst the tourism sector generates roughly USD 5.9 billion annually, only USD 3.8 billion of that sum actually enters the domestic banking system. Stressing that every dollar earned by the nation ought to flow through local banks, Munawwar noted that the central bank is significantly stepping up its surveillance to ensure foreign receipts are brought onshore.
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Responding to a about foreign exchange shortages, Munawwar pointed out that although collecting corporate tax is MIRA’s statutory mandate, a striking majority of resorts fail to pay it.
“According to figures shared with us by MIRA, out of 185 resorts, only about 50 pay income tax. Only around 50 resorts,” the Governor told MPs. “What does that imply? Either they are genuinely making no profit, or there are underlying irregularities.
“Doesn’t that warrant an audit? Their books must be audited. MIRA shouldn’t just be knocking on the doors of corner shops. We have to verify whether the accounts in our tourism industry are properly in order.”
Munawwar emphasised that if all foreign currency generated by the country were channelled into the domestic banking system, it would comfortably suffice to meet the public’s foreign exchange needs. To that end, the central bank plans to enforce much stricter regulatory oversight starting next year to capture those inflows.
“Rigorous monitoring is critical. Without it, those dollars bypass our banking system entirely. And if they stay outside the banking network, they simply do not circulate within the domestic economy,” he added.
Nevertheless, the central bank chief cautioned that even with tighter oversight and enforcement underway, unwinding the country’s longstanding foreign exchange deficit will not happen overnight.
