Corporate tax surge lifts Maldives revenue 12.2 percent in early 2026

Government revenue rose sharply in the first four and a half months of 2026, with corporate income tax and related business levies emerging as the main drivers of growth, according to the latest fiscal data released by the Ministry of Finance and Public Enterprises.

Total revenue and grants reached MVR 16.78 billion by 14 May 2026. That is MVR 1.83 billion higher than the same period last year, an increase of 12.2 percent. Tax collections alone climbed 17.1 percent to MVR 13.3 billion.

The ministry's Weekly Fiscal Developments report for week 19 shows the business and property tax category, which includes corporate income tax, rose 31.3 percent to MVR 2.68 billion. That single basket contributed an additional MVR 637.6 million compared with the first four and a half months of 2025.

Within that category, corporate income tax receipts reached MVR 1.32 billion, up 9.5 percent year on year. Non-resident withholding tax climbed to MVR 663 million, a 37.1 percent rise. A residual line for other business and property taxes tripled to MVR 490.5 million from MVR 162.7 million a year earlier.

GST and tourism levies also climb

Goods and Services Tax remained the single largest revenue source. Collections reached MVR 7.54 billion, up 14.3 percent. Tourism GST, paid by visitors staying at resorts, hotels, guesthouses and safari vessels, brought in MVR 5.37 billion. General GST on local goods and services contributed MVR 2.17 billion.

Other tourism-linked levies performed strongly. Green Tax revenue rose 20.7 percent to MVR 942.3 million. Airport service charges and departure tax climbed 28.7 percent to MVR 817.3 million. The Airport Development Fee added a further MVR 846.7 million.

A six-year-old income tax regime

The Maldives introduced a unified income tax framework in 2020 under the Income Tax Act, which replaced the earlier Business Profit Tax Act and the Bank Profit Tax Act. Incorporated businesses pay 15 percent on taxable income above MVR 500,000, according to the Maldives Inland Revenue Authority. Commercial banks pay a flat 25 percent. International transport operators are taxed at 2 percent on gross income sourced in the Maldives.

Corporate filings are due by 30 June each year, with interim payments in July and January. The latest collection figures reflect final 2025 settlements together with interim payments for the 2026 tax year.

Spending rises faster than revenue

Expenditure rose at a steeper pace. Total recurrent and capital spending reached MVR 16.66 billion by 14 May, an increase of 22.4 percent. Recurrent spending was MVR 14.68 billion, up 21.6 percent. Capital spending stood at MVR 1.97 billion, up 28.8 percent.

Subsidies recorded the sharpest increase among major spending lines. Subsidy outlays reached MVR 2.27 billion, up 77.8 percent from MVR 1.28 billion a year earlier. The Ministry of Finance attributed the rise to higher costs for fuel used in electricity generation. The ministry said tensions in the Middle East have pushed up international fuel prices and that subsidies are being used to keep prices of basic goods and services stable for households.

Spending on salaries, wages, allowances, and pensions rose to MVR 5.32 billion, an increase of 9.9 percent. The ministry said this reflected ongoing pay harmonization across government agencies. Debt servicing and interest costs were broadly unchanged at MVR 2.06 billion.

Surplus narrows

Despite the higher spending, the budget recorded a surplus of MVR 118.2 million for the period. That is significantly smaller than the surplus of MVR 1.35 billion recorded in the same period of 2025, when expenditure was lower.

Cumulative loan repayments through 14 May reached MVR 8.67 billion, a sharp rise from MVR 2.52 billion a year earlier. Transfers to the Sovereign Development Fund stood at MVR 923.3 million.

The annual budget approved for 2026 sets total expenditure at MVR 49.21 billion and projects revenue and grants of MVR 40.37 billion, implying a planned deficit of MVR 8.84 billion before financing and interest costs.

The Ministry of Finance publishes the Weekly Fiscal Developments report each week and notes that the figures are provisional, pending reconciliation.