Data for June 2016 from the Economic Review of Maldives Monetary Authority has revealed that, the government’s annual revenue has increased by 320 million Rufiyaa. The total revenue by June 2016 was 1.6 billion Rufiyaa.
In addition, the review shows that, with the increased revenue government has increased spending on capital expenditures. The monthly review published by MMA shows that by June 2016 the total expenditure was 1.7 billion Rufiyaa. Total revenue of this year increased by 72.1 million Rufiyaa when compared to June 2015. According to the report, the expenditure increased because the government revenues increased as well. Both non-tax and tax revenues have increased.
A large share of tax revenue was telecommunications tax and import duty. Moreover, tax from goods and services increased the revenue as well. Non-tax revenue was mainly from fees for Special Economic Zones.
There is an increase in capital expenditure because the government is spending a lot on developmental projects this year. Statistics show that, there are projects going on in almost every island of the Maldives. While the capital expenditure has increased, the review shows that the recurrent expenditure has decreased. This was mainly due to reductions in salaries, wages and allowances.
Increase in capital spending is usually seen in the early stages of rapid economic development. Economists often say that for a developing country, it is important to spend more on capital investments so that later generations can benefit from it.
With increased revenue, government increases spending on capital expenditure
