President Abdulla Yameen Abdul Gayoom has ratified a bill to impose an Airport Development Charge (ADC) of $12 USD and $25 USD from locals and foreigners respectively that depart from Ibrahim Nasir International Airport (INIA).
The bill on taxes and fees to be charged from airports in the Maldives was presented by member of ruling Progressive Party of Maldives (PPM) and Gahdhoo MP Ahmed Rasheed. It was approved by the parliament on November 24.
Originally proposing to impose an ADC of $25 USD from all passengers that depart from INIA, the bill was subsequently altered to charge only $12 USD from locals on the initiative of ruling Progressive Party of Maldives (PPM)’s lawmakers. While some members of PPM had stated then that the alteration was based on the president’s judgment, President Yameen had later refuted the statement and expressed ire over the decision. According to the bill, only passengers with Diplomatic Immunity will be exempted from ADC. Meanwhile, persons exempted from Airport Service Charge are passengers with Diplomatic Immunity, transit passengers and those under the age of two years.
As ADC will come into effect in INIA four months after its implementation, the airport will commence charging the new tax on 4 April 2017. The new law states that the airlines of the passengers bear the responsibility of collecting ADC. The airlines will be penalised under the tax act should they fail to pay the ADC to Maldives Inland Revenue Authority (MIRA).
As the government already takes an Airport Service Charge of $25 USD from foreign passengers and USD 12 from local passengers departing from INIA, the total amount to be charged with ADC will increase to USD 24 from locals and $50 USD from foreigners.
While the government has passed to charge ADC from 2017 onwards, INIA’s previous operator, GMR Group of India, had also tried to impose the same tax of $25 USD which had been promptly halted by the Civil Court. The proposed charge had sparked much controversy among the public with the majority opposing its implementation, as airport development had not been completed at the time it was proposed. The state budget also proposes depositing the revenue from ADC into the Sovereign Development Fund the government is looking to establish next year with a capital of MVR 1.1 billion. While the original proposal of the bill, with $25 USD to be charged from all passengers, projected that ADC will bring a revenue of MVR 575 million next year, the amendment to the bill reducing ADC to $12 USD for local passengers will reduce the estimated revenue.