Debate begins on Projected State Budget for 2015

The parliamentary debate on the MVR 24.3 billion Projected State Budget for 2015 has commenced this morning.

Presenting the budget at the parliament sitting on 4 November, Minister of Finance and Treasury Abdulla Jihad said that 65 percent of the budget, or MVR 15.8 billion, has been allocated for recurrent expenses.

The ministry has estimated that 26 percent of the budget would be spent on salaries and allowances, 13 percent would be spent on social security and welfare, and 8 percent would be spent on operations.

The total estimated government income and free financial aid for 2015 is MVR 21.5 billion. This is made up of MVR 13 billion as tax revenue, MVR 6.8 billion as non-tax revenue, and MVR 1.7 billion as free financial aid.

The government has proposed five items as measures to increase income. They are revision of several import duty rates from 1 July 2015, introduction of green tax, introduction of a fee on investments in Special Economic Zones (SEZ), income from long-term lease of land, and lease of ten islands for resort development.

Speaking at the Budget Committee on 10 November, Jihad said that as part of the measured to increase income, the import duty on tobacco would be increased form 150 percent to 300 percent.

He said that in addition, the import duty on vehicles would be increased from 100 percent to 150 percent, and import duty would be introduced for perfumes, at 10 percent.

The budget deficit is estimated at MVR 1.3 billion. Jihad said that this would be financed by MVR 1.1 to be received as financial aid, and additional MVR 223 million.

Jihad also noted that MVR 2.9 billion has been allocated to the education sector for 2015, which is 32 percent higher than the amount allocated to this sector for 2014.