Ras Malé to earn eight times more tourism GST than a resort, minister says

Ras Malé is expected to generate eight times more tourism goods and services tax (TGST) for the state than a lagoon leased for resort development, Infrastructure Minister Dr Abdulla Muththalib said on 24 October.

Speaking as a guest speaker at the Maldives Accountants Forum, Muththalib said the project, which he described as one of the government's most important, would bring the state about USD 340 million (MVR 5.2 billion) in TGST a year. That works out at roughly USD 680,000 per hectare annually, he said.

He compared this with resort development under the Tourism Act, which he said was estimated to bring the state between USD 75 million and USD 316 million over 99 years. Under the Ras Malé model, the state would receive about USD 3.1 billion over 10 years, he said.

Leasehold, not ownership

Land and buildings in Ras Malé will be sold on leasehold terms of up to 99 years in line with Maldivian law, the minister said. The project will develop 8,800 properties on 500 hectares of land being reclaimed at Fushidhiggaru lagoon.

The legal agreement for UAE-based developer Eagle Hills to develop the site was signed on 21 September. The company is marketing the project as Maldives Waterfront and Marina. Under the deal, the government says the state will receive 5,000 housing units worth about USD 500 million (MVR 7.7 billion) in advance.

The President's Office has said the state will also receive 10 per cent of the developer's revenue, estimated at about USD 3.1 billion, and that the project will not be exempt from taxes.

Jobs and resort protections

Muththalib said Ras Malé would open two kinds of business opportunity: services such as cleaning, maintenance, property management, catering, retail and restaurants; and financial and professional services including accounting, along with the digital, marine, health and education sectors.

He said the “one island, one resort” model would continue alongside the project, describing it as the foundation of Maldivian tourism and the reason the country commands high prices. “I will ensure protection for those businesses,” he said.

The minister said resort tourism would not stop because of the real estate business, and described Ras Malé as an opportunity to diversify the country's tourism.