MPs criticize MMA’s recommendations on 2023 budget

The recommendations of Maldives Monetary Authority (MMA) on the proposed state budget for 2023 has drawn heavy criticism from some of the members of the Parliament’s Budget Committee.

MMA officials were summoned for a meeting with the committee on Sunday, during which they made a presentation of their recommendations for the budget.

MMA recommended the government implement greater fiscal consolidation measures instead of raising tax rates, and warned the printing of MVR would lead to a drop in the currency’s value.

MMA said that though the proposed changes to the tax system for 2023 is meant to reduce the deficit, the proposed budget does not reflect that.

Instead of raising the tax rates to manage the government’s expenditure, it is important that the government implement cost cutting measures in light of the potential adverse effects such a policy could have on the Maldivian economy, said MMA.

MMA said that though the government has projected huge sums of income as grants from foreign countries in 2023, the actual amount received as grants has been lower by an average of MVR 768.6 million compared to the projected amount over the last six years, excluding 2020.

MMA recommended the government write a conservative grant figure in the budget.

Hanimaadhoo MP Abdul Ghafoor (Gapo) responded that the recommendations had singled out the proposed tax hike by the government for criticism, and alleged that it showed the central bank was one-sided in its recommendations. He said that the recommendations were designed to cater to a specific group of people, and that recommendations should reflect history and the current global situation.

Dhuvaafaru MP Ismail Ahmed said described the recommendations as minutes of opinions by a specific group of MPs.

MMA’s Governor Ali Hashim responded MMA looks at the totals on the budget, and would make recommendations to reduce the deficit if found necessary.

It is the responsibility of MPs to determine how balance out the budget and make the necessary changes, he said.

However, MPs criticized the MMA, stating that they had mentioned nothing favorable in their recommendations and only focused on the negative.