Tourism Tax Surge Drives State Revenue to USD 1.24 Billion

The Maldives has seen a significant increase in state revenue, driven primarily by a surge in Tourism Goods and Services Tax (TGST) collections. According to the latest Weekly Fiscal Development Report from the Ministry of Finance and Public Enterprises, total revenue and grants reached USD 1.24 billion as of June 4. This figure represents a 10.1 percent increase, or USD 120 million, compared to the USD 1.12 billion recorded during the same period last year. The Ministry noted that this growth reflects a steady upward trend across key economic sectors. Taxes remain the backbone of the state's income, accounting for 78 percent of total revenue. Tax collections rose by 12.4 percent, climbing from USD 855 million last year to USD 960 million this year. The most significant contributor to this growth was the TGST, which saw a 20 percent jump. While the sector generated USD 325 million in the previous period, it has already brought in USD 389 million this year. General GST revenue also experienced an uptick, rising from USD 143 million to USD 162 million. However, this revenue growth has been offset by a sharp rise in government spending. Total recurrent and capital expenditure reached USD 1.24 billion, marking a 17.6 percent increase over the previous year. A substantial portion of this spending was directed toward critical infrastructure, with USD 53.1 million allocated to the development of airports, bridges, and roads. External pressures have also impacted the national budget. Due to rising global fuel prices triggered by conflicts in the Middle East, government subsidy spending has nearly doubled. Subsidies rose from USD 84 million in the same period last year to USD 149 million this year, highlighting the vulnerability of the economy to international market volatility.