Government proposes Mrf 11.9 billion budget for mid term

Wednesday, November 25th, 2009

ali-haashim3Minister of Finance Ali Hashim yesterday submitted to the People’s Majlis a budget of Mrf 11.9 billion as estimated mid term budget for the year 2010.

Speaking at the Majlis yesterday, Minister Hashim said that the estimated budget for next year would be Mrf 11,973,95,567 and it has a deficit of Mrf 4.6 billion as government’s projected income for next year will be Mrf 7.3 billion.

The minister explained that the deficit of Mrf 4.6 billion will be secured through various ways like Mrf 1 billion is proposed foreign aid for developmental projects in the country, Mrf 348 million as foreign loan assistance, Mrf 1.3 billion which is estimated to come from privatizing government companies and Mrf 1.9 from selling Maldives Monetary Authority (MMA) treasures.

Explaining sources of revenue to the government, Minister said that a special importance was given to establish a system of tax for next year as possible means of revenue. In this regard, tax will be taken from corporate profits and goods and services tax (GST) from tourism sector. Minsiter Hashim added that corporate tax can be taken only if the draft legislation submitted to the Majlis for that purpose gets passed before the end of this year. He also said that GST tax will be imposed towards the end of next year.

Minister Hashim said that even though it was previously forecasted that the tourist arrival to Maldives would decline by 11% this year due to the global economic meltdown, it was noted that tourist arrival to Maldives increased above the expected number by the mid of this year. He said that 6 lakh tourists arrived in Maldives so far this year and this is 5.1% more than what was previously estimated.

In his budget speech, Minister Hashim noted that the blow to the tourism sector due to the economic slowdown had also affected the financial markets which have in turn slowed down capital investment and construction businesses. He added that the construction sector’s profits had gone down by 16.8% this year but he said that as tourism sector is showing signs of growth, it is expected that construction sector would grow by 3.4% next year.

Looking at the fisheries sector, Minister Hashim said that even though the growth of this sector was slowing down since 2006, it is forecasted that the next year would be better for fisheries sector as price of oil had gone down this year. Minister Hashim said that it is expected that the growth of fisheries sector will be maintained at 10% next year.

The budget speech by Finance minister also highlighted the measures government would take to cut down its expenditure. He said that next year, the number of employees in the civil service will be reduced and redundancy money required for this purposes has also been allocated in next year’s proposed budget.

Minister noted that next year’s budget will accomplish government’s goals as well as will be accepted by the International Monetary Fund (IMF). He said that the budget’s structure fits the structure agreed with IMF for the purpose of improving the country’s economy and reduce budgetary deficit.

Minster Hashim said that when compiling this budget, due consideration was given tot the recommendation proposed by IMF, World Bank and Asian Development Bank (ADB) to address the structural problems in the country’s economy. In this regard, reducing the size of the government and creating a small government in its place, abolishing public subsidy and initiating target subsidy, loans taken from MMA to secure the government budget deficits by changing it to bonds and paying it back in installments and finally reducing the expense uncured on government employees.

After the budget speech was concluded, the Bill was sent to a 15 member temporary committee. Debate on the Bill has been scheduled for Tuesday, 1 December 2009.

Reader Comments

Post a comment

 characters available



The opinions expressed here are those of the individual authors and commenters and do not necessarily represent the views of Miadhu News Daily. We do not take responsibility for the opinions, facts, or claims presented by individual authors or commenters, and reserve the right to moderate or delete inappropriate comments.

Miadhu Opinion Poll
  • Sorry, there are no polls available at the moment.