MMA Governor Urges Accelerated Financial Reforms to Curb Deficit

The Governor of the Maldives Monetary Authority (MMA), Ahmed Munavvar, has called for the acceleration of financial reform measures to ensure that the state's recurrent expenditure remains within the determined limit. Speaking during a meeting of the Budget Study Committee regarding the government's budget proposal of 59.7 billion rufiyaa for the upcoming year 2027, which has been submitted to the People's Majlis, the Governor emphasized the need for strong measures to increase revenue and stabilize expenditures. The proposed budget for next year is a deficit budget of 9.4 billion rufiyaa, representing seven percent of GDP in terms of productivity ratio. The Central Bank's suggestion to the budget states that, as specified in the State Fiscal Responsibility Act, it is necessary to keep the increase in recurrent expenditure lower than the increase in revenue. It also states that state expenditure must be reduced and policies to sustainably increase revenue should be implemented quickly to achieve the medium-term target set to reduce the overall deficit to five percent of GDP by the end of 2028. With no new measures devised to increase revenue next year, requests have also been made to implement existing policies and bring about urgent legal reforms to strengthen revenue administration. Specifically, it was noted that revenue collected as corporate income tax from the tourism sector could be increased compared to the present level.