Parliament passes amendment to reduce resort lease extension fees

Parliament on Monday passed a bill to amend the Tourism Act, proposing changes to lease extension fees for resorts and integrated resorts.

The bill, introduced by MP Abdulla Rasheed on behalf of the government, was approved with 76 votes during Monday’s sitting.

The current Tourism Act allows for lease extensions of up to 49 additional years if certain conditions are met by the lessee. These conditions include the payment of all dues, such as rent, penalties, taxes, and fees owed to the government, excluding rent and penalties deferred by the tourism ministry under specific agreements.

The 10th amendment to the act, passed on December 27, 2020, outlined that:

• For lease extensions of up to 49 additional years, a lump sum payment of $5 million was required within the first two years from December 27, 2020, with a fee of $10 million after that period.
• For lease extensions of up to 50 years, a payment of $200,000 per year was set, applicable after the initial two-year period.

The newly proposed amendment adjusts these requirements as follows:

• For lease extensions of up to 49 additional years, a lump sum of $5 million must be paid within six months from the effective date of the amendment. After six months, the fee increases to $10 million.
• For lease extensions of up to 50 years, $200,000 per year is to be paid within six months from the amendment’s effective date, followed by an additional $200,000 for extensions beyond the six-month period.

If ratified by President Mohamed Muizzu, resorts will have a six-month window to extend their leases by paying $5 million instead of the previously stipulated $10 million.