State spending up 16%, TGST revenue grows by 5%

As of October 29, the state’s total revenue and grants reached MVR 34.52 billion, marking a 5.3 percent increase from the MVR 32.79 billion recorded during the corresponding period in 2023, according to the latest Weekly Fiscal Developments report published by the Ministry of Finance and Public Enterprises.

The growth was primarily driven by higher tax revenue, which rose by 9.1 percent to MVR 26.70 billion, compared to MVR 24.48 billion during the same period last year.

Revenue from the Tourism Goods and Services Tax (TGST), the largest contributor to state income, increased by 5.0 percent from MVR 8.88 billion in 2023 to MVR 9.32 billion this year. Continued growth in the tourism sector kept TGST as the leading source of government revenue over the past week.

Other major revenue sources also recorded increases. Business and Property Tax rose by 23.7 percent to MVR 6.07 billion, while Import Duty increased by 12.3 percent to MVR 2.90 billion. General Goods and Services Tax (GGST) generated MVR 4.63 billion, while Green Tax revenue grew by 2.3 percent to MVR 1.88 billion. Among non-tax revenue sources, income from property increased by 28.2 percent to MVR 2.27 billion, driven by higher resort lease rents. Grants amounted to MVR 0.53 billion, although overall non-tax revenue declined by 8.8 percent.

Meanwhile, total state expenditure stood at MVR 38.99 billion as of October 29, representing a 16.2 percent increase compared to the same period in 2023. Recurrent expenditure rose by 16.9 percent to MVR 33.68 billion, while capital expenditure increased by 12.0 percent to MVR 5.30 billion.

Expenditure on employee salaries and benefits increased by 14.7 percent to MVR 6.15 billion, while administrative and operational costs reached MVR 20.28 billion. Capital spending on infrastructure, including land and buildings, rose by 10.4 percent to MVR 4.63 billion. Specifically, expenditure on land and buildings increased by 35.4 percent, while spending on bridges and harbours rose by 20.1 percent.

Other major recurrent expenditures included MVR 10.81 billion in grants and subsidies, marking a 34.9 percent increase. This comprised MVR 4.31 billion in subsidies and MVR 1.96 billion for the Aasandha health insurance scheme. A further MVR 2.08 billion was disbursed as grants to local councils.

As of October 29, the overall budget recorded a deficit of MVR 4.47 billion, while the primary balance stood at a deficit of MVR 0.33 billion.