Finance Minister: Professional employees will be exempt from planned pay cuts

Employees of state-owned enterprises belonging to professional categories will be exempt from the planned 10 percent salary reduction, says Finance Minister Moosa Zameer.

Zameer was summoned for a meeting with the Parliament’s Public Accounts Committee on Monday, during which he was questioned regarding the implementation of the cost cutting measures announced by the government.

Zameer told the committee that the government is engaged in numerous efforts to implement fiscal reforms and SOE reforms.

Zameer said that the preparations to implement the reforms are “nearly complete”, adding that the Finance Ministry will share the timeline for the rollout of the reforms “soon.”

He noted the decision announced by President Dr. Mohamed Muizzu last week to cap salaries for SOE employees at MVR 90,000, and to cut the salaries of employees who are currently paid a monthly salary above MVR 12,000.

Zameer said that employees who earn below MVR 12,000 as well as those belonging to professional categories will be exempt from the measures.

“That is because if we were to cut the salaries across the board for certain types of engineers and certain other types of professionals, they could leave in search of better options which would make it difficult to run the companies,” he said.

Zameer agreed that SOEs need to step relying on government bailouts, and said that the companies have been given certain targets they need to meet.

He also spoke about the plans to increase the Tourism Goods and Services Tax (TGST) from 16 percent to 17 percent.

Zameer said the decision was made after the Finance Ministry, the Maldives Monetary Authority (MMA) and other stakeholders conducted extensive research and formulated forecasting models.

“Our research shows there is an immediate need to implement this,” he said.

On Wednesday, President Muizzu announced the decision to introduce pay cuts for two years in the 2025 state budget – which the Finance Ministry is scheduled to present to the Parliament on Thursday.

 He asked to have his salary cut by half, and to have the salaries of parliamentarians, political appointees, employees of state-owned enterprises, heads of independent institutions, and top officials in the judiciary reduced.