Finance Minister Presents MVR 59.7B State Budget for 2027, Pledges No New Taxes

Minister of Finance and Public Enterprises Hassan Zareer presented a proposed state budget of MVR 59.7 billion for the fiscal year 2027 to the People’s Majlis, marking an expenditure reduction of MVR 4.5 billion compared to the budget approved for 2026.

Submitting the proposed budget to the parliament, Minister Zareer outlined a fiscal blueprint focused on expenditure consolidation, improved revenue collection, and macroeconomic stabilization without raising taxes on citizens or businesses.

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Presenting the macroeconomic forecasts, the Minister noted that after expanding by 6.3 per cent in 2025, economic growth for 2026 is expected to moderate to between 0.8 per cent and 1.6 per cent, revised downward from earlier projections of 5.3 per cent amid global economic pressures. 

However, economic activity is forecast to rebound in 2027, with gross domestic product projected to grow between 3.9 per cent and 6.8 per cent, while inflation remains contained at approximately 1.0 per cent. 

Gross official reserves are estimated to reach USD 817 million by the end of 2026 before rising to USD 907.2 million by the end of 2027.

Of the total MVR 59.7 billion outlay, net government expenditure is projected at MVR 52.6 billion. 

This includes MVR 42.7 billion in recurrent expenditure for operational spending, administrative overheads, civil service compensation, and public subsidies, alongside MVR 9.9 billion in capital expenditure. 

Within capital allocations, MVR 8.2 billion has been earmarked for the Public Sector Investment Programme to sustain and complete ongoing national infrastructure projects. Total state revenue and grants for the year are estimated at MVR 43.2 billion, representing an increase of MVR 1.4 billion compared to the 2026 budget.

To meet revenue targets without introducing new tax levies, the administration plans to widen the tax base, close administrative loopholes, and deploy an electronic invoicing system compliant with international standards. 

Additionally, the budget proposes transferring the fiscal mandate of the Maldives Customs Service under the direct supervision of the Ministry of Finance and submitting legislative amendments to existing tax laws to enhance compliance.

The 2027 budget also directs funding toward key social and economic sectors. 

Provisions have been made to designate and develop a dedicated picnic island in every administrative atoll, alongside targeted allocations for environmental initiatives, including Climate Adaptation Model Projects. 

For the fisheries industry, the government plans to construct an additional 11,130 metric tonnes of cold storage capacity and increase domestic ice production by 550 metric tonnes per day.