Economic minister unsure of why state revenue declined

While the Ministry of Finance has revealed that the state revenue significantly decreased in January, when inquired by RaajjeTV about the reason for this, Minister of Economic Development and Trade Mohamed Saeed claimed he “does not know” the cause.

Speaking at the press conference held at the President's Office on Tuesday afternoon, Minister Saeed claimed that he would need to look at the details before saying anything for sure, as he is unsure of the reasons at the moment.

He went on to note that he would need to look at the figures to be able to say something.

The minister repeatedly asserted that the decline in import revenue was not due to the Free Trade Agreement (FTA) signed between China and Maldives.

Speaking at the Public Finance Committee of the People’s Majlis on Monday, Deputy Speaker of the People’s Majlis Ahmed Nazim revealed that the state revenue has significantly decreased and that the government has not yet explained the reason for such a sharp decline in revenue.

Nazim stressed that it is concerning that the revenue has sharply declined and that no one has been able to explain a reason for the decline yet.

Minister Saeed stated that in January, the Maldives imported goods totaling MVR 1.4 billion, with only MVR 33.9 million of that coming from China under the FTA. He added that only MVR 2.2 million in import duties were waived as a result, so there is no connection between import duties and the decline in revenue.

Nazim, who represents the main ruling People’s National Congress (PNC), noted in the Public Finance Committee that the revenue declined so sharply because a large quantity of cigarettes were imported before the duty was reduced, and since that stock has not been exhausted, cigarette imports have slowed down after the duty was increased, resulting in the government not receiving the expected revenue from cigarettes.

However, knowing the numbers, we now know what's happening, that the biggest revenue comes from cigarettes, that cigarette imports have now slowed down, that when cigarette prices were very low, a large quantity of cigarettes were imported and duties paid, so because the cigarette stock is not exhausted, and cigarettes are not being imported yet, that portion from cigarettes is not being received, we know that's why the revenue has decreased"

Deputy Speaker of the People’s Majlis Ahmed Nazim.

Nazim noted that there are no signs of the economy improving or expenses being reduced yet.

While Nazim has made these remarks, Minister Saeed has asserted that the economy is “progressing well”.

However, journalists at the press conference kept pointing out that there is no evidence of progress in the figures.

While the Economic Minister claimed the Maldivian economy is progressing, the latest financial figures released by the Ministry of Finance indicate that the total state revenue for the past month had decreased significantly, with revenue dropping from almost all major sources of state income.

This includes declines in tax revenue, non-tax revenue, import duty revenue, personal income tax, business profit tax, GST, departure tax, airport development fee revenue, as well as revenue from fees and rents.

According to the "Weekly Fiscal Development" figures published by the Finance Ministry, the total revenue received from the beginning of this year until February 6, was MVR 874 million less compared to the same period last year.