Subsidy expenditure falls by 21.2% as budget surplus rises
This year’s reduction in subsidy spending comes amid increases in revenue and a slowdown in overall expenditure.
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Subsidy spending from the Maldives’ state budget has declined by 21.2 percent this year as of 8 May 2025, according to the latest Weekly Fiscal Developments report issued by the Ministry of Finance.
During the same period in 2024, the government had spent approximately MVR 1.4 billion on subsidies. This year’s reduction in subsidy spending comes amid increases in revenue and a slowdown in overall expenditure.
As of 8 May 2025, tax revenue reached MVR 14.2 billion, while the government recorded a budget surplus of MVR 1.9 billion. In contrast, the budget had recorded a deficit of MVR 2.4 billion by the same date last year.
The Ministry’s report stated that the government has received 35.8 percent of the total estimated revenue and grants for the year, which reflects a 6.8 percent increase compared to the same period in 2024.
Tax revenue accounted for 78.0 percent of total government revenue, amounting to MVR 11.1 billion. Goods and Service Tax (GST), corporate income tax, and import duties contributed 79.2 percent of this figure.
Despite a reduction in import duty revenue—attributed to policy measures related to public health and social welfare—revenue from other tax categories rose due to growth in the tourism sector and broader economic activity. Compared to the same period in 2024:
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GST revenue increased by 6.8 percent
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Corporate income tax revenue increased by 4.6 percent
Non-tax revenue also saw an increase of 36.6 percent year-on-year. This includes revenue from resort lease extension fees.
By 8 May, 25.0 percent of the total annual expenditure budget had been utilised, a decrease of 21.8 percent from the previous year.
Recurrent expenditure made up 91.7 percent of total expenditure, with staff-related spending increasing by 7.9 percent. However, overall recurrent expenditure declined by 5.2 percent compared to the previous year.
Subsidy expenditure dropped by 21.2 percent, in part due to changes in global oil prices.
Capital expenditure fell by 73.2 percent over the same period last year. The Ministry attributed this to revised capital expenditure policies and the impact of increased foreign disbursements in the first quarter of 2024 for major construction projects.
