DTIS, Volume I - Enhanced Integrated Framework (EIF)
DTIS, Volume I - Enhanced Integrated Framework (EIF) DTIS, Volume I - Enhanced Integrated Framework (EIF)
Capital markets are still in their infancy in the Maldives. The Capital Market Division (CMD) was created in 1999 within the MMA followed in 2002 by the establishment of the Maldives Stock Exchange (Securities Trading Floor). operated by CMD. Only the shares of three partially privatized State Owned Enterprises (SOEs) are listed and traded: the State Trading Organization Plc (STO); Bank of Maldives Plc (BML) and Maldives Transport and Contracting Company Ltd (MTCC). During the DTIS exercise, a Securities Bill was under consideration in the parliament. V. Fiscal Regime The current tax base in the Maldives is narrow, severely limits the government's revenueraising capacity and accentuates its fiscal deficits. The Maldives has no direct taxes and no general consumption tax. There are three main types of indirect taxes - import tariffs, an export tax on fish and a tourist bed tax. In 2004 these taxes accounted for 92 per cent of total government tax revenue (94 per cent in 1995). It has been noted that the tourist bed tax is highly regressive in nature as it applies equally to all categories of resorts – from the comfortable to the luxurious - and is not related to the service provided or the investment made. Aside from taxes, the government relies on land-lease payments for tourist resorts as another major source of revenue. This has become the second largest single revenue earner after tariffs (see Table 2.4). International tourism in the Maldives is the single most important revenue-generating sector. Directly and indirectly it generated an estimated total of Rf 1,333.8 million (US$ 104.2 million) in 2004, corresponding to more than 40 per cent of total government revenue, estimated at Rf. 3.3 billion (US$ 256 million), up from 28 per cent in 1995. On the expenditure side, expansionary fiscal policies have raised budget deficits from 1.4 per cent of GDP in 1997 to an estimated 5.3 per cent in 2001. Since then the deficit declined, reaching 1.8 per cent in 2004. With the effect of the tsunami the deficit is expected to increase to 6 per cent for 2005, with further increases expected in 2006 and 2007. The budget situation is expected to normalize in 2008. Expenditure has surged above targeted growth levels, especially on government administration and social services, but also a reflection of the commitment of the government to improve human welfare. Accordingly, expenditure growth has outstripped revenue expansion. To some degree, revenue shortfalls have been offset by external aid. The government maintains an ambitious public investment programme. This programme recognises the fact that for economic development to take place and for the private business sector to invest in administrative regions other than Male’ and Hulhumale’ and in sectors other than tourism and fisheries, it is essential that public investment addresses the constraints posed in the atolls and the lack of fully functional infrastructure. Table 2.5 11
elow provides data on the public investment programme for recent years. The increase for 2005 to some extent includes tsunami rehabilitation investment. Table 2.4: Central Government Finance (Rf in million) 2005 pre- post Diff. in per 2000 2001 2002 2003 2004 tsunami tsunami centª Total revenue and grants 2373 2523 2715 3088 3395 4201 4503 -7 Total revenue 2207 2311 2582 2964 3321 4106 3663 11 Current revenue 2203 2294 2578 2937 3302 4080 3637 11 Tax revenue 1014 1047 1092 1269 1638 1882 1650 12 Import duties 653 662 692 817 1127 1209 1136 6 Tourism 277 293 305 360 412 552 393 29 Other 85 92 94 92 99 122 122 0 Non-tax revenue 1189 1248 1486 1668 1664 2198 1987 10 SOE profit transfers 357 384 423 571 545 632 632 0 Resort lease payments 427 433 601 576 554 759 600 21 Other 405 431 463 522 566 807 755 6 Capital revenue 4 17 5 28 18 26 26 0 Grants 166 212 133 124 75 94 840 -790 Expenditure and net lending 2694 2886 3117 3375 3664 4645 6104 -31 Current expenditure 1876 1971 2109 2346 2658 3475 3748 -8 Capital expenditure 864 941 1026 1206 1100 1268 2455 -94 Net lending -46 -26 -18 -177 -94 -98 -98 0 Overall balance -322 -363 -402 -287 -269 -444 -1602 -261 Overall balance, excluding grants -487 -575 -535 -411 -343 -538 -2441 -353 Current balance 327 323 469 591 645 605 -111 118 Domestic financing 318 218 30 -132 -137 139 -1 101 Foreign financing 4 146 372 419 405 305 434 -42 Additional external financing requirement -- -- -- -- -- -- 1169 n.a. Government debt (end of period) 3003 3326 3857 4144 4413 4857 5430 -12 Of which: Foreign 1686 1831 2204 2623 3028 3333 4047 -21 ª) The column indicates the percentage difference in projected budget estimates before and after the tsunami Source: Use of Fund Resources—Request for Emergency Assistance, IMF, February 2005, Table 3 Table 2.5: Domestic Public Sector Investment Programme 2003 – 2005 (Rf million) Year 2003 2004 2005 Sector No of projects per cent of total No of projects per cent of total No of projects per cent of total Capacity building 27 15.0 32 9.8 50 18.3 Infrastructure development 49 47.0 43 44.9 51 41.5 Social development 147 36.3 136 43.6 180 38.2 Economic development 10 1.7 9 1.6 12 2.0 Research & planning - - 2 0.0 - - Total Budget 304.8 304.9 381.5 Source: MPND statistics department 2005 12
- Page 1 and 2: FINAL R E P O R T Volume 1 MALDIVES
- Page 3 and 4: GSP HACCP HDFC HDI HIES HH HRD HS I
- Page 5 and 6: TRIPS TRTA TSA TTMP UAE UK UNCTAD U
- Page 7 and 8: CHAPTER 6: CUSTOMS SERVICES AND TRA
- Page 9 and 10: major stakeholders as the basis of
- Page 11 and 12: C. ECONOMIC TRENDS Buoyant GDP grow
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- Page 15 and 16: The recommendations cover these iss
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- Page 25 and 26: government, and lawmakers are elect
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- Page 29 and 30: to Sri Lanka. However, by 2004 the
- Page 31 and 32: This relatively high proportion of
- Page 33: On an annual basis, total NFA of th
- Page 37 and 38: According to the estimates prepared
- Page 39 and 40: Table 2.8: Damage to agricultural f
- Page 41 and 42: II. Imports - Merchandise There has
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- Page 51 and 52: on goods deemed luxury goods (e.g.
- Page 53 and 54: the Japan and USA markets. 11 Fish
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- Page 57 and 58: emoved. However, in order to provid
- Page 59 and 60: EBA. Appropriate transition arrange
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- Page 63 and 64: CHAPTER 4 POVERTY REDUCTION AND HUM
- Page 65 and 66: Table 4.2: Poverty Gap Ratios per R
- Page 67 and 68: produced locally and are readily av
- Page 69 and 70: commerce, information and communica
- Page 71 and 72: Table 4.3: Fishery Sector employmen
- Page 73 and 74: This also requires policies that ta
- Page 75 and 76: with routine functions of administe
- Page 77 and 78: Applying for a license to invest in
- Page 79 and 80: E. MINISTRY OF FISHERIES, AGRICULTU
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- Page 83 and 84: Overall, it is estimated that the c
elow provides data on the public investment programme for recent years. The increase<br />
for 2005 to some extent includes tsunami rehabilitation investment.<br />
Table 2.4: Central Government Finance (Rf in million)<br />
2005<br />
pre- post Diff.<br />
in per<br />
2000 2001 2002 2003 2004 tsunami tsunami centª<br />
Total revenue and grants 2373 2523 2715 3088 3395 4201 4503 -7<br />
Total revenue 2207 2311 2582 2964 3321 4106 3663 11<br />
Current revenue 2203 2294 2578 2937 3302 4080 3637 11<br />
Tax revenue 1014 1047 1092 1269 1638 1882 1650 12<br />
Import duties 653 662 692 817 1127 1209 1136 6<br />
Tourism 277 293 305 360 412 552 393 29<br />
Other 85 92 94 92 99 122 122 0<br />
Non-tax revenue 1189 1248 1486 1668 1664 2198 1987 10<br />
SOE profit transfers 357 384 423 571 545 632 632 0<br />
Resort lease<br />
payments 427 433 601 576 554 759 600 21<br />
Other 405 431 463 522 566 807 755 6<br />
Capital revenue 4 17 5 28 18 26 26 0<br />
Grants 166 212 133 124 75 94 840 -790<br />
Expenditure and net lending 2694 2886 3117 3375 3664 4645 6104 -31<br />
Current expenditure 1876 1971 2109 2346 2658 3475 3748 -8<br />
Capital expenditure 864 941 1026 1206 1100 1268 2455 -94<br />
Net lending -46 -26 -18 -177 -94 -98 -98 0<br />
Overall balance -322 -363 -402 -287 -269 -444 -1602 -261<br />
Overall balance, excluding grants -487 -575 -535 -411 -343 -538 -2441 -353<br />
Current balance 327 323 469 591 645 605 -111 118<br />
Domestic financing 318 218 30 -132 -137 139 -1 101<br />
Foreign financing 4 146 372 419 405 305 434 -42<br />
Additional external financing requirement -- -- -- -- -- -- 1169 n.a.<br />
Government debt (end of period) 3003 3326 3857 4144 4413 4857 5430 -12<br />
Of which: Foreign 1686 1831 2204 2623 3028 3333 4047 -21<br />
ª) The column indicates the percentage difference in projected budget estimates before and after the tsunami<br />
Source: Use of Fund Resources—Request for Emergency Assistance, IMF, February 2005, Table 3<br />
Table 2.5: Domestic Public Sector Investment Programme 2003 – 2005 (Rf million)<br />
Year 2003 2004 2005<br />
Sector<br />
No of<br />
projects<br />
per cent<br />
of total<br />
No of<br />
projects<br />
per cent<br />
of total<br />
No of<br />
projects<br />
per cent<br />
of total<br />
Capacity building 27 15.0 32 9.8 50 18.3<br />
Infrastructure development 49 47.0 43 44.9 51 41.5<br />
Social development 147 36.3 136 43.6 180 38.2<br />
Economic development 10 1.7 9 1.6 12 2.0<br />
Research & planning - - 2 0.0 - -<br />
Total Budget 304.8 304.9 381.5<br />
Source: MPND statistics department 2005<br />
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