Business community welcomes economic and fiscal reform of the govt- Hilmy

Sunland Travel Board Director, HussainHilmy has said that the business community welcomes the economic and fiscal reform programme of the government.

Speaking at the inauguration of the government’s “Fiscal and Economic Reform Programme” held Monday evening at Dharubaaruge, Sunland Travel’s Board Director, HusseinHilmy said that “the business community welcome the bold initiative being undertaken by your administration to carry out a program of comprehensive economic and fiscal reform.”

Hilmy said that the Maldives economic policy and legal framework needs to undergo modernisation and reform for a number of reasons. He said that the structural imbalances caused the government to seek an IMF structural adjustment program, whose objectives are to reduce public debt and create financial and economic conditions that will facilitate economic growth.

“Hence the calls for the introduction of taxation to the Maldives in order to create the necessary fiscal space. We also recognize there is a need to implement more efficient methods of economic redistribution to ensure that the benefits of economic growth are shared by all in this country in an equitable manner--- taxation facilitates such redistribution,” he said.

Hilmy underscored the need to mobilise more domestic resources to ensure continued economic growth in light of Maldives graduating from the UN's Least Developed Country category earlier this year.

“With a proper tax system it would be necessary for a modern economy to shift away from import duties as a major source of government revenue. This will be of tremendous benefit to everybody as it will help to bring down the cost of goods for businesses and the public at large. However, a proper tax system requires several preconditions related to tax administration namely; transparency, accountability, predictability, and effective combating of corruption,” he said.

Sunland Travel Board Director said that he is proud of the fact that the Maldives is one of the leading tourist destinations in South Asia. He said that the boon in tourism has been the main engine of growth in the Maldivian economy for the past 40 years. He however added that tourism is an extremely volatile industry subject to sudden shocks and highly sensitive to fluctuations in global economic conditions.

Hilmy noted that the last several years have been particularly challenging for the industry as global markets have gone through and continue to go through turmoil.

“At a juncture like this, it is prudent to reiterate that for a successful tax regime, it needs to ensure the competitiveness of the Maldivian tourism industry in the global marketplace. Competitiveness means more than keeping tax rates and thresholds within a certain level. It also means the need for stability, certainty and simplicity. In a globalized market environment, a stable and transparent tax regime will ensure the Maldives remains a leading destination in the region,” he said.

Hilmy said that such conditions are also vital in creating an attractive environment for Foreign Direct Investment in the country.

“Creating a conducive landscape for the inflow of Capital into the country would be an absolute necessity to achieve the development goals that we all aspire to,” he said.

Addressing the President, Hilmy said that those at the tourism industry would like to see the substantial tax revenue that is being paid by this industry to the government utilized efficiently and transparently to ensure that there is a meaningful and definite improvement in the lives of the general public. He also added that the tourism industry welcomes President Nasheed’s efforts to reduce public expenditure and create a more efficient and lean government.