Import duty collections have sharply declined to just MVR 1.99 billion, while business and property tax revenues have fallen to MVR 4.65 billion.

This was revealed in the latest Weekly Fiscal Developments Report published by the Ministry of Finance and Planning, as of 4 September 2025.

The drop is attributed to a decrease in withholding tax and other business-related taxes compared to the same period last year.

In addition to falling tax income, dividends from state-owned enterprises have also decreased, further straining government revenue streams.

Despite these worrying trends, the ministry reports a budget surplus of MVR 868.7 million. However, this figure appears misleading. The surplus has only materialized because the government has withheld significant portions of the approved budget for development projects, a tactic that paints a rosier picture of the fiscal situation than reality suggests.

So far this year, total revenue and grants have amounted to MVR 26.31 billion, while expenditures have reached MVR 25.44 billion. Of this revenue, taxes contributed MVR 20.51 billion, with the economy still heavily reliant on tourism-related income. The Tourism Goods and Services Tax (TGST) generated MVR 7.46 billion, while General GST brought in MVR 3.52 billion.

These numbers reaffirm that the state's fiscal health is heavily dependent on tourism and international air travel, leaving the economy vulnerable to external shocks.

Meanwhile, grants remain minimal, with the government receiving only MVR 203.1 million so far this year.

It is widely expected that the reported surplus will shrink significantly after fiscal reconciliation. Further, the government’s reputation continues to be tarnished by its failure to pay contractors and private parties on time, despite having approved and received bills for completed work. This raises serious questions about fiscal discipline and transparency, especially when combined with artificially inflated surplus claims.