Government doubles third quarter income

The Maldives government has almost doubled state income for the third quarter of 2011, increasing revenue 92 percent on the same quarter last year, according to the Maldives Inland Revenue Authority (MIRA).

Total dollar income for the period, according to MIRA, was US$60.5 million, made up largely of tourism lease payments (31.7 percent) and income from the 3.5 percent Tourism Goods and Services Tax (19.3 percent, or US$11.6 million). That tax is set to increase to six percent next year.

Total state income stands at Rf 3.4 billion for the year so far (US$220 million), according to MIRA.

Presenting the 2012 budget to parliament this week, Finance Minister Ahmed Inaz predicted that altogether, government income was expected to reach a record Rf 9 billion (US$583 million) this year.

Total expenditure out of the 2012 state budget is estimated to be Rf14.6 billion (US$946.8 million), an 18 percent increase from 2011. However the Inaz highlighted that recurrent expenditure was in line with income for the first time in many years, and the deficit was expected to drop to single figures.

Based on current estimates for 2011 the Maldives had recorded economic growth of 7.5 percent, Inaz said, an improvement of 5.6 percent in 2010. Growth was aided by a 21 percent tourism arrivals – the Maldives expects to welcome its millionth visitor for the year.

The introduction of the TGST was particularly significant in 2011 as it revealed that the government had been substantially underestimating the size of the tourism economy, which based on TGST receipts was actually three times larger than previously imagined.

Registration and collection has also gone surprisingly smoothly. Speaking to Minivan News in May, Inaz remarked on willingness of tourism businesses of all sizes to declare and pay the tax.
“The TSGT is being taken from big resorts as well as small guest houses on remote islands – very small businesses. They declare – amazingly, they declare,” he noted.
However despite the large influx of foreign currency into the tourism sector the Maldivian economy remains subject to a ongoing dollar shortage, with most people unable to exchange rufiya into dollars at the official rate of Rf 15.42.

Inaz expressed concern that 47 percent of transactions in the domestic economy were made through other currencies – almost all resorts charge in dollars and bank overseas – and called on the Maldives Monetary Authority (MMA) as the country’s central bank to take measures to enforce the use of rufiya as legal tender.


3 thoughts on “Government doubles third quarter income”

  1. We didn't hear anything about the government's plans to create jobs and help the thousands of unemployed youth in the country.

    Where are the plans to control expenditure and increase the capacity of the economy? Budgets are not just about balancing figures; they have to move the country forward with a serious plan which we haven't seen.

    Out of the 12 billion Rufiyaa budget, just 20% will be spent on investment. Come next year, we will be heading to India with the begging bowl in hand and crawling on our knees again, because we overspent yet again! That's the true reality of these so-called budgets!

  2. JJ. How about the increasing and accumulating DEBT of the government? The influx of ruffiya through debt financing? Where does that money go? Inaz is dancing to the politicians tunes. This year budget with 4 Billion debt the ruffiya against dollar will exceed. NExt year the Government will print Ruffiya and dollar rate will rise and that is for sure..

  3. Politics has driven this country insane.

    I seriously believe that party politics has no place in our society.

    Inaz is bound by rents paid to him as wages for his cabinet position as well as god-knows-what-else.

    No measures in place to address the dollar crisis, no steps to address the youth employment issue which threatens law and order in our country as well, also the only good thing - 2 billion for the health sector - is planned to be issued as investment capital for private persons developing health outposts in the atolls. God help us if the MDP decides to allow their hair-brained activists to dream up medical businesses overnight.


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