Fiscal reforms projected to cut spending by MVR 6.6 billion

A string of fiscal reforms planned for next year, including the reform of the state health insurance service Aasandha and subsidies, are expected to save the state MVR 6.6 billion in spending, according to the Finance Ministry.

The MVR 56.6 billion budget presented to the Parliament by Finance Minister Moosa Zameer on Thursday includes total MVR 11.5 billion in fiscal reforms.

According to the Finance Ministry, the reforms are expected to save the state MVR 6.6 billion in spending.

The reforms include shifting from indirect subsidies provided through SOEs to targeted subsidies, and reforming Aasandha to make the system more holistic and sustainable.

The government also plans on mitigating fiscal and external sector risks associated with the changes to the price of fuel.

Other reforms include the reform of the pension scheme and State-owned Enterprises (SOEs).

The Finance Ministry projects the state will collect MVR 39.8 billion in revenue and grants next year, including an additional MVR 4.9 billion from new initiatives to boost revenue, including an increase in the import duty on cigarettes, an increase in the Green Tax, the TGST, the Airport Departure Tax and the Airport Development Fee.

The Maldives’ economic growth is projected to rise to 6.4 percent next year.