President ratifies amendments to the Decentralization Act

President Dr Mohamed Muizzu has last night ratified the bill of amendments to the Decentralization Act which limits the financial authority of local councils.

While the President has ratified the bill passed by parliament on August 6, over 60 councils and the main opposition party Maldivian Democratic Party (MDP) has released statements calling for the bill to be rejected.

Despite this, the President claimed in his speech in B. Dharavandhoo in his recent trip to Baa atoll that the amendments would not narrow down council's rights and authorities, and that it would instead further empower and enrich citizens.

"I know the decentralization system from A to Z. Some people are labeling these amendments that the government, which is on the side of the public, is bringing as not being for the benefit of the people," he claimed.

In his speech, the President went on to justify each article of the amendments and said that it would further empower the people.

As per the amendments, local authority companies cannot undertake businesses or investments under MVR 10 million. Any businesses that contravene the amendment should be ceased within 90 days of the bill being ratified, it states.

The President said that this particular amendment is designed to facilitate further growth of small and medium enterprises on the islands. He said that local authority companies can serve the people through revenue generated from investments that are over MVR 10 million.

Some councils, however, retorted that only a few councils are able to conduct investments of this scale, and the amendment would effectively bring a halt to businesses conducted by local authority companies.

Other amendments to the Decentralization Act state that councils cannot charge rent from buildings and land given for the provision of fundamental services such as water and sewerage, councils must pay taxes from businesses conducted, and that councils must disclose financial statements of their accounts to the Finance Ministry and LGA on request.

Further, councils must seek authorization from the Finance Ministry and LGA to lease land or hire employees during the last year of their term.

In his speech in Dharavandhoo, the President claimed that the amendments are being brought to further solidify and champion and the decentralization system.

Regarding the amendments, HDh. Kulhudhuhfushi Mayor Mohamed Athif has said that should the amendments be ratified, it would cause a loss of MVR 3.9 million per year to the Kulhudhuhfushi City Council.

Annual loss of MVR 3.9 million to Kulhudhuffushi if amendments are followed: Mayor