Government Cuts Subsidy Spending by 21% as Revenues Surge

While income from tobacco-related duties declined due to higher taxes and a vape ban, GST rose by 6.8 percent, and Corporate Income Tax increased by 4.6 percent.
On the expenditure side, total government spending stands at MVR 12.3 billion—25 percent of the total budget for the year. This is 21.8 percent lower than the same period last year. Most of the spending, 91.7 percent or MVR 11.28 billion, was on recurrent costs. While salaries, pensions, and wages rose by 7.9 percent, overall recurrent expenditure still fell by 5.2 percent due to the drop in subsidy spending.

Capital expenditure saw a significant decrease—dropping by 73.2 percent from MVR 3.82 billion last year to just MVR 1.02 billion this year.
As a result, the Maldives has moved from a budget deficit of MVR 1.4 billion at this point last year to a surplus of MVR 1.9 billion this year. The Finance Ministry also reported that the government has collected 35.8 percent of projected revenue and grants for the year.
This financial progress follows the approval of a MVR 56.6 billion national budget by the ruling People’s National Congress (PNC), which holds a supermajority in Parliament.