Maldives unveils new Tourism Trust Fund regulations for long-term growth

The government of the Maldives has released the formal regulations governing the Tourism Trust Fund recently created to support sustainable tourism and to foster growth within the sector. The initiative is designed to secure the long-term viability of the tourism industry while upholding excellence in every dimension of tourism governance.

The Tourism Trust Fund was created to address several key goals for the Maldives tourism industry. The primary objective is to support the continuous development of the sector, ensuring that the tourism offerings in the country remain world-class and capable of meeting the demands of both visitors and operators. Additionally, the fund is dedicated to maintaining high-quality standards within the industry while ensuring that the benefits of tourism are distributed in a sustainable manner.

Another critical aspect of the fund is to provide financial assistance for capacity-building initiatives, enabling local businesses and tourism stakeholders to improve their services, infrastructure, and overall operational capacity. The focus on capacity building aims to further solidify the Maldives’ position as a top-tier global tourist destination.

The capital for the Tourism Trust Fund will be drawn from four main sources, ensuring diverse and sustainable funding streams:

• Sponsorships and External Funding: The Ministry of Tourism will receive sponsorships and other forms of funding from both local and international sources for various tourism-related activities. These funds will be directed towards projects that enhance the country’s tourism offerings.
• Corporate Social Responsibility (CSR) Contributions: Tourism operators, as mandated by the Tourism Act, will contribute a portion of their revenues to the fund as part of their CSR commitments. These contributions are expected to play a significant role in bolstering the fund’s resources and supporting initiatives that positively impact the community and environment.
• Investment Income: The fund will generate income through investments made by the fund itself, diversifying its financial base and ensuring its long-term viability.
• Training Fees: Funds will also be collected through public tenders related to industry training programmes, ensuring that the tourism workforce is continuously upgraded to meet global standards.

The Ministry of Tourism will oversee the management of the Tourism Trust Fund. To ensure proper governance, a seven-member Fund Management Committee will be appointed by the Minister of Tourism. This committee will comprise representatives from key government entities, including the President’s Office, Ministry of Tourism, Ministry of Finance, Ministry of Economic Affairs, Attorney General’s Office, Ministry of Construction and Housing, and the Maldives Inland Revenue Authority (MIRA).

The Ministry of Tourism will manage the administrative functions of the committee and establish a dedicated secretariat to facilitate its operations. This organisational structure is designed to ensure that the fund is managed efficiently and in accordance with government policies and objectives.

For the first five years, the Tourism Trust Fund will primarily focus on several key areas of development:

• Tourism Sector Development Projects: A significant portion of the funds will be allocated to the development of projects that directly benefit the tourism industry, such as enhancing existing tourism infrastructure and developing new facilities to meet the growing demands of tourists.
• Investments in Tourism Facilities: The fund will also be used for investments in tourism-related facilities, improving the quality of resorts, hotels, and other accommodation offerings, as well as developing amenities and attractions that enhance the visitor experience.
• Industry Capacity Building Programs: Recognising the importance of a skilled workforce, the fund will finance educational programmes aimed at building the capacity of local businesses and tourism stakeholders. These programmes will focus on enhancing service delivery, management practices, and overall operational efficiency.
• Public Social Benefit Activities: The fund will support public benefit activities that directly contribute to the well-being of local communities, enhancing the positive impact of tourism on the broader society.
• Fund Usage in Accordance with Trust Statement: To ensure that the fund is used appropriately, all expenditures will be in accordance with the formal Trust Statement. This will help maintain transparency and accountability throughout the fund’s administration.

One of the central aspects of the Tourism Trust Fund is its commitment to transparency. To ensure the proper use of funds, the Ministry of Tourism is required to submit an annual report and financial statements to key government entities, including the President, Parliament, Ministry of Finance, and the Auditor General’s office. This report will be submitted within three months following the end of each fiscal year.

The Auditor General will then audit the reports, ensuring that all funds are accounted for and spent in alignment with the established guidelines. The findings from this audit will be submitted to Parliament within two months of receiving the reports. This process is designed to guarantee that the fund is being managed responsibly and that its contributions to the tourism sector are effectively monitored.