The Maldives recorded a strong increase in income tax revenue during the first five months of 2026, with collections rising 28.5 percent to USD 175.10 million, underscoring the economy's resilience amid global uncertainties and ongoing fiscal challenges.
Statistics released by the Maldives Inland Revenue Authority (MIRA) show that income tax collections reached USD 175.10 million between January and May, compared to USD 136.19 million during the same period last year.
The increase comes as the International Monetary Fund (IMF) highlighted the crucial role of the tourism sector in sustaining economic activity and supporting foreign currency inflows, helping the country navigate a difficult macroeconomic and financial environment.
According to MIRA, the largest share of income tax revenue came from corporate and non-individual entities, which contributed USD 84.31 million during the five-month period. This represented an 8.3 percent increase compared to the USD 77.82 million collected from the sector during the corresponding period in 2025.
Taxes paid by non-residents and temporary residents also recorded substantial growth, generating USD 47.67 million, up 40 percent from USD 33.92 million collected during the same period last year.
One of the most notable increases was recorded in the banking sector, where income tax collections surged by 208 percent to USD 31.78 million, compared to USD 10.31 million in the first five months of 2025.
Individual income tax collections also continued to expand, reaching USD 13.88 million, an increase of 11.8 percent from the USD 12.97 million recorded during the corresponding period last year.
The revenue was collected under the Income Tax Act, which came into effect on 1 January 2020, while taxation of salaries and wage income commenced on 1 April 2020. Under the legislation, Maldivian residents are taxed on both domestic and foreign income, while non-residents and temporary residents are taxed only on income earned within the Maldives.
The strong revenue performance coincides with a generally positive assessment of the Maldivian economy by the IMF following an Article IV Mission visit conducted from 4 to 14 June.
In its preliminary findings, the IMF noted that the Maldives has demonstrated improved resilience over the past year despite facing significant macroeconomic and financial pressures. The institution highlighted that tourism continues to play a pivotal role in supporting growth, generating foreign exchange earnings and sustaining broader economic activity.
"Over the past year, the Maldivian economy has navigated a challenging macroeconomic and financial environment with improved resilience," said Piyaporn Sodsriwiboon, who led the IMF delegation. She noted that extensive fiscal consolidation measures implemented in 2025, including revenue mobilisation and expenditure controls, helped ease financing pressures and improve economic stability.
The IMF observed that although tourism remains the backbone of the economy, the sector continues to face challenges from global developments, including spillover effects from conflicts in the Middle East and rising energy prices.
As a result, the Fund projects economic growth to moderate to around one percent in 2026 before recovering to approximately four percent in 2027 as conditions improve.
Despite the expected recovery, the IMF warned that downside risks remain elevated, citing high debt levels and the likelihood of a widening current account deficit. The institution stressed the importance of maintaining fiscal reforms while protecting vulnerable groups within society.
The IMF also highlighted the importance of expanding external demand through bilateral free trade agreements and pursuing structural reforms aimed at removing barriers to growth, strengthening human capital and enhancing climate resilience.
According to the Fund, integrating climate considerations into public financial management and investment planning will be critical for unlocking additional climate financing and supporting long-term sustainable development.
While challenges remain, the strong growth in income tax revenue and the continued performance of the tourism industry indicate that key sectors of the economy are maintaining momentum, providing important support to the government's broader fiscal and economic reform agenda.
