Island Chic’s Babble

Foreign investment in the Maldives has been key to the creation of a successful tourism industry, which contributes to one-third of Maldives’ GDP. An important reason for the positive attitude of international investors towards investing in the Maldives has been its tax system, which is relatively favorable to foreign investors.

The existing tax system in the Maldives is very simple and easy to administer. There is no income tax, corporate tax or property tax. Most of the revenue (three fourths of the total revenue) come from import duties, tourism tax, state owned enterprises and resort lease rents. Other taxes include bank profits tax, land rent, royalties, administrative fees and charges, work permit and interest receipts.

Out of these, the most relevant tax to investors, tourism tax is levied at a flat rate of USD 8 per night per bed, regardless of the tariff rate for the bed. For this reason, a bed which costs USD 10,000 per night will pay the same amount of tax as a bed which charges USD 200 per night. Even though, this reduces the administrative burden of tax collection and compliance, it is highly distortionary in terms of tax burden on the payers. The disappointing fact is that, the highest burden will be borne by the lower end resorts with lower tariff rates, as a relatively huge percentage of their profits go towards Tourism Bed Tax, while the luxury resorts will pocket a higher margin of profit.

The current political environment in the Maldives has been extremely exciting as we are going towards our very first multi-party elections in a month or so. Many candidates in their party manifestos have been proposing ambitious tax systems with huge figures as expected government revenue.

Now, it is indeed necessary for the Maldives to do away with the existing tax system and go towards comprehensive tax reforms, especially in the case of the aforementioned tourism tax. At the same time, we must be careful to not get carried away with big numbers and expected revenue figures.

It is important to realize the complications and intricacy involved in deciding an appropriate tax rate for the tourism tax, as well the possibility of broadening the tax base to include a corporate tax. Simultaneously capacity building in the area of tax collection and auditing is of utmost importance. It is very clear that the existing tax collecting authorities (Department of Inland Revenue or MMA) with total staff less than 100, will not be properly equipped to handle the variety of issues a reform implementation will bring in.

Still… the mere fact that such issues are on the agenda for the presidential candidates and the fact that they are giving considerable thought to bringing about positive change, is paving way for productive change, towards a better economy for us! Hooray to the Multi party elections!

Google’s wonder product for free photo management for pc, Picasa has now been improved and taken to a new level with the new launch of the beta version of Picasa 3.0.

What makes Picasa so awesome is the simple way you can maneuver and play you’re your photos. You can organize and manage your photos, edit, crop, style etc. to them with one click.

In addition to this synchronizing your photo albums on the pc to the web has never been made easier! Hence, with the introduction of the beta version, Google’s two year old web product, Picasa Web Albums has now been improved and made even better for its users.

Try it out and see for yourself! Download beta version of Picasa 3.0 here.

Maldivian government has officially announced that Maldives will be open to international bidders to search for petroleum within the Maldivian territory. According to the Ministry of Economic Development and Trade, two international companies have sent requests to the government seeking permission to explore Maldives in search of petroleum; one among them is a well known petroleum company.

Due to the recent discovery of petroleum in the neighboring countries, India and Sri Lanka, foreign companies has been enthusiastic about the possibility of discovering oil in the Maldives.

If discovered, this could be a much needed step for the Maldives to move towards economic diversification and be less dependent on the highly vulnerable tourism sector for its bread and butter. However before the excitement takes its course, there are a few things we must be highly concerned about.

As tourism contributes to more than one third of the country’s Gross Domestic Product, any adverse effects which may result from the heavy drilling and exploration processes should be carefully studied, before it’s carried out. As the Maldives has little except its beautiful beaches and clear waters, safeguarding our tourism industry must be highly prioritized before we get carried away with the mere possibility that Maldives has petroleum.

At the same time, any disturbance to the vulnerable balance in ecosystems which our fisherman rely on will prove to be disastrous to our economy as well as to our people, considering the fact that fish and sea food is the major part of Maldivian household diet.

For these reasons, I hope that the relevant authorities will not be blind sighted by the overwhelming possibility of future prosperity, so as to compromise on our present livelihood.

The much awaited Google Chrome now arrives with a bang! Thousands on enthusiastic google fans downloading every second!

Indulge your self! Download Google Chrome!

Recent growth trend of the Japanese economy hasn’t been all rosy and neither is the political climate for the governing Liberal Democratic Party. However, the unanticipated resignation of the Japanese Prime Minister, Yasuo Fukuda was not something the LDP expected.

Japan has had negative economic growth for quite some time, especially due to the recent hike in oil prices and the ever increasing food prices. An $18-billion stimulus package was introduced recently, which was dismissed by most market analysts as ineffectual.

With excessive control from the opposition parties over Japan’s upper house and pressing for an election, Fukuda has been unable to influence major legislation and for this reason, many see Japan as a country facing a vacuum in political leadership today.

The combination of economic downturn together with the political drift of the governing Liberal Democratic Party was shown by an apparent plummeting approval rate in the last month which went to below 30% in most polls.

Perhaps, the political frustration and the worsening economy is to be blamed. However, Fukuda blames what he saw as an obstructionist opposition party for his departure, but he offered no clear explanation for his timing.

News about Dell trying to trademark the term “cloud computing” has been going around ever since it was mentioned in a document on the U.S. Patent and Trademark Office’s Web site.

Apparently, Dell is trying to grab control of the term “cloud computing” which may just define technology infrastructure for years to come.

According to USPTO website, Dell’s application has reached the Notice of Allowance phase, where a company receives “a written notification from the USPTO that a specific mark has survived the opposition period … and has consequently been allowed for registration.” The opposition period gives other parties a chance to object to an application. However, this does not guarantee the registration of the trademark.

The term cloud computing, which has emerged in the last few years, refers to “a computing environment where data and services reside in scalable datacenters accessible over the Internet”. The demand for such environments is being driven by the growth of technologies such as social networking, streaming media, and mobile devices.

Looking at the current trends, if Dell manages to get the patent, it may very well rule the technology infrastructure for the next decade!