Maldives tables MVR 59.7bn 2027 budget, no tax rises

The government has proposed a state budget of MVR 59.7 billion for 2027, MVR 4.5 billion less than this year's, with Finance Minister Hassan Zareer pledging that no existing taxes will be raised.

Zareer presented the budget, totalling MVR 59,704,440,795, to the People's Majlis on 29 October, the Ministry of Finance and Public Enterprises said. Parliament approved a budget of MVR 64.2 billion for 2026.

Total expenditure is projected at MVR 52.6 billion. Of this, MVR 42.7 billion is recurrent spending and MVR 9.9 billion is capital spending on development projects and investments, with MVR 8.2 billion set aside for the Public Sector Investment Programme (PSIP).

Revenue without new taxes

State revenue for 2027 is estimated at MVR 43.2 billion, made up of MVR 33.6 billion in tax revenue, MVR 9.1 billion in non-tax revenue and MVR 349.3 million in grants, according to the budget figures presented to Parliament.

Zareer said revenue would instead be raised by tightening tax administration, including a new e-invoicing system, wider use of the Maldives Guest Information System and moving the fiscal mandate of Maldives Customs Service under the Finance Ministry. The ministry said the GST registration threshold will rise from MVR 1 million to MVR 1.5 million from 1 January 2027.

Deficit and debt

The budget deficit is projected at MVR 9.4 billion in 2027, or 7.3% of GDP, up from MVR 7.6 billion (6.2% of GDP) expected for this year, Zareer said. The government aims to bring the deficit below 5% of GDP by the end of 2028.

Total public debt is projected to reach MVR 161.3 billion in 2027, comprising MVR 108 billion in domestic debt, MVR 43.4 billion in external debt and MVR 9.7 billion in government-guaranteed debt. Zareer said direct government debt would stand at 117% of GDP next year, with a target of 107.9% by 2029.

The minister said MVR 11.7 billion will have been spent on debt repayments by the end of this year, the highest in the country's history. The budget plans to raise MVR 6.9 billion from external sources and MVR 11.9 billion domestically, and to draw MVR 2.3 billion from the Sovereign Development Fund.

Among key allocations, the ministry said MVR 3 billion is earmarked for housing projects and MVR 750 million as equity for housing loan schemes. The health sector receives MVR 10.2 billion, while education includes MVR 136.3 million for the free degree programme and MVR 651 million for higher education loans.

Parliament will now review the budget before approval. The government's target to complete 70% of ongoing projects next year is covered in a separate Maldives Now report.