Government’s recurrent expenditure hikes with higher spending on remuneration

The government recurrent expenditure has increased owing to increased spending on salaries and allowances of public sector employees, reports the Ministry of Finance.

The ministry in its latest update, confirmed a revenue of MVR 8.81 billion as of March 20, 2025. In the corresponding period last year, state revenue stood at MVR 7.97 billion, which indicates an increment of MVR 840 million this year.

The highest revenue stream to the government is from Goods and Services Tax (GST), with a collection of MVR 3.71 billion; out of which MVR 1.05 billion has been collected from General Goods and Services Tax (GGST) and the remaining MVR 2.67 billion from Tourism Goods and Services Tax (TGST).

The total tax revenues collected to the state so far reached MVR 6.99 billion, while the remaining MVR 1.78 billion had been through non-tax sources.

From the non-tax revenue sources, the state had collected MVR 340 million in Airport Development Fee, and MVR 289 million as rent from resorts.

The Maldives Inland Revenue Authority (MIRA) reports the primary reason for the revenue bump is due to the tax return deadline falling on a public holiday, due to which the period was extended until March 3^rd.

Additionally, the deadline for collecting rent from resorts was extended during the same period, which had in turn driven up the revenue stream as well.

The state’s total expenditure by the review period had reached MVR 7.63 billion, which is a decline of MVR 1.26 billion in the same period last year. The total state expenditure had reached MVR 8.89 billion.

Despite a notable decline in the overall state expenditure so far this year, recurrent expenditure has observed an increment. As of the review date, recurrent expenditure total stood at MVR 7.08 billion whereas the figure stood at MVR 6.69 billion in the same period last year. The recurrent expenditure breakdown for this year include:

• Salaries: MVR 1.07 billion
• Allowances: MVR 1.05 billion
• Pension, Retirement Benefits, and Gratitude: MVR 508 million

Due to the stagnation of developmental projects, capital expenditure has declined this year. While the state had spent MVR 2.20 billion on capital expenditure as of March 20^th last year, the figure stood at just MVR 554.1 million in the same period this year.

The loan repayments of the state so far include a payment of USD 100 million for a loan facility that had been acquired during the previous administration. The loan had been repaid inclusive of USD 26 million in interest.