Finance Ministry on Monday proposed a record MVR 37.5 billion state budget for next year.
Finance Minister Ibrahim Ameer presenting the state budget to the parliament on Monday said while the government has budgeted for MVR 37.5 billion as expenditure for next year, the estimated revenue is MVR 29.92, leaving the archipelago with a budget deficit of MVR 5.7 billion.
The budget for 2020 will be focused mainly on recurrent expenditures which accounts for MVR 22.2 billion from the budget. While MVR 10.2 billion has been allocated for PSIP, MVR 5 billion has been set for capital expenditure.
Five new strategies have been included in next year's budget to increase state revenue. It is estimated that the new changes will generate an additional MVR 2.5 billion as revenue.
This includes the introduction of quota fees for expatriates, and increasing the work permit fees. While this is estimated to generate a revenue of MR 714 million, the introduction of income tax is estimated to generate a further MVR 770.6 million. A revenue of MVR 290 million is expected as acquisition cost for new resorts that will be leased during the year.
Changes to customs fees and import duty is likely to increase revenue by an additional MVR 558 million, and airport service charges and airport development fees are expected to increase revenue by MVR 319 million.
The proposed budget for next year will likely invite more criticism after the new government since taking office nearly a year ago has thus far failed to fully utilize this year's budget despite getting a supplementary budget in August.
An initial budget of MVR 30.2 billion was approved for the current year by the parliament. However, the government in August got the parliament to sign off on an additional MVR1.7 billion as a budget supplement.
The government has come under heavy criticism from the opposition for failing to launch major infrastructure projects this year with the budget reflecting the unused funds for PSIP.
2020 Budget overview:
Total proposed budget: MVR 37.5 billion
Recurrent expenditure: MVR 22.2 billion
PSIP: MVR 10.2 billion
Capital expenditure: MVR 5.1 billion
Revenue: MVR 29.9 billion
Deficit: MVR 5.7 billion
