Pres hints at possible tax hike to boost revenue
"One target is to expand the tax base to bolster revenue generation, which forms the cornerstone of my proposed economic agenda," he said.
Summary
"One target is to expand the tax base to bolster revenue generation, which forms the cornerstone of my proposed economic agenda," he said.
Incumbent president Dr. Mohamed Muizzu on Monday hinted at plans to increase taxes in a bid to boost state revenue.
In his first presidential address to open the parliament for the year since assuming office in November, the president highlighted the dire fiscal situation of the island nation stressing that the government has been forced to take stringent measures aimed at reducing the fiscal deficit and alleviating existing constraints.
"One target is to expand the tax base to bolster revenue generation, which forms the cornerstone of my proposed economic agenda," he said.
According to the president, Public Sector Investment Program (PSIP) projects will also be carefully segmented and scheduled based on the state's financial condition, while prioritizing the objective to expedite project completion and swiftly benefits.
"Government's plan is to formulate and implement our own reform policy to improve the financial situation of the
country and to bring the debt and fiscal situation to a sustainable level. It is crucial for this country’s economic and
fiscal future," he added.
The president also added that he would not appoint any more senior political positions other than in exceptional
circumstances, to reduce government expenditure.
Despite a good economic outlook, the country is facing major challenges to public finances.
The revenue-expenditure gap has widened, and the fiscal deficit has widened to unsustainable levels. The budget deficit increased to 13.5 billion rufiyaa due to the economic downturn caused by the COVID-19 pandemic.
Despite, productivity returning to normal by the end of last year, the budget deficit was more than the year 2020 with 14.5 billion rufiyaa.
