Finance Ministry has proposed a record MVR 37.5 billion state budget for next year.
Presenting the budget at the parliament on Monday, Finance Minister Ibrahim Ameer said while the state has budgeted for MVVR 37.5 billion as expenditure for next year, the estimated revenue is at MVR 29.92 billion leaving a budget deficit of MVR 5.7 billion.
The 2020 budget will mainly focus on recurrent expenditures which account for MVR 2.2 from the budget. While MVR 5 billion has been set for capital expenditure, MVR 10.2 billion has been allocated for PSIP.
Unlike previous years, the 2020 State Budget was compiled to complement aims set out in the SAP publicized by the government in October. The plan includes pledges made under the manifesto of the current administration.
Five new measures have been introduced by the government to increase national income by MVR 2.5 billion in 2020.
This includes the introduction of Income Tax which is estimated to generate MVR 770.6 million and the introduction of quota fees for expatriate workers and increasing work permit fee which will further generate MVR 714 million.
Changes to customs fee and import duties are expected to increase revenue by MVR 558 million while airport service charges and airport development fees are likely to increase revenue by MVR 319 million. Furthermore, a revenue of MVR 290 million is expected as the acquisition cost for new resorts that will be leased during the year.
The Finance Ministry has stated that the state will sell T-bills and T-bonds in the domestic market to cover the budget deficit. It is estimated that MVR 564 million will be received through the sale of bills and bonds. Furthermore, sovereign bonds will be sold to foreigners and loans will be acquired.
