President Dr Mohamed Muizzu has today ratified the 16th to Amendment Denentralistion Act (Act No. 7/2010). The bill was passed during the 22nd sitting of the second session of the 2025 parliamentary term on Wednesday, 6 August 2025.
The Amendment introduces several key changes aimed at strengthening the decentralised governance system. Its primary objectives are to define the scope of business activities conducted by Local Authority Companies established by councils, review certain principles governing the provision of State grants to councils, and establish procedures for significant financial decisions in the final year of a council’s term.
The Amendment stipulates that business activities undertaken by Local Authority Companies must meet specified conditions, with any activities found to be in conflict with the law required to cease within 90 days of the amendment coming into force. It also introduces a provision prohibiting councils from charging rent for land or buildings allocated to various parties for the provision of essential public services.
Furthermore, the Amendment stipulates that the appointment of staff, leasing of land, lagoons, and reef areas within the council’s jurisdiction, and the commencement of new development projects not included in the council’s development plan, may only be carried out in accordance with guidelines set by the Ministry of Finance and the Local Government Authority if a council’s term will end within 365 days or less.
Following ratification, the Amendment has been published in the Government Gazette and has now come into effect.
President Dr Mohamed Muizzu emphasised that these changes are an important step towards further strengthening and advancing the decentralised system in the Maldives.