Government revenue increases in first half of 2016

Government revenue increases in first half of 2016
June 14 15:30 2016

The Maldives Inland Revenue Authority collected MVR6.5 billion (US$421 million) in the first five months of 2016, an increase of 13 percent compared to the same period last year.

According to the MIRA’s monthly revenue report, some MVR1.14 billion (U$74 million) was collected last month, which was 50 percent higher than forecast as a deadline for Business Profit Tax in April was extended to the first week of May.

“In addition to this, MVR 312 million [US$20 million] was collected as Bank Profit Tax, which has to be paid on July every year.

“As the deadline for submission of the 2015 [Business Profit Tax] return and making payments 30 April 2016 falls on a holiday, deadline extension to 2 May 2016 is also one of the reason for the increase in revenue collected during May,” the tax authority explained.

GST contributed 45 percent of the total revenue from January to May, followed by 17.7 percent from business profit tax.

Tax

MIRA had collected record revenues in January and February on the back of a sharp increase in tourist arrivals. But receipts in March and April declined as compared to the same periods last year.

An increase of T-GST receipts last month compared to May 2015 meanwhile suggests higher tourist arrivals. But the tourism ministry has yet to publish figures for May.

Tourist arrivals from January to April had grown by 3.6 percent compared to the same period last year.

While arrivals from traditional European source markets have picked up, the number of Chinese tourists declined by -9.7 percent in the first five months of 2016 compared to the previous year.

After falling -20 percent in February despite the Chinese New Year falling during the month, Chinese arrivals registered a -13.3 percent decline in March, followed by a -6.1 percent decline in April.

Chinese tourists visiting the Maldives had tripled from about 100,000 in 2010 to more than 350,000 in 2014.

But the annual growth in Chinese tourists declined for the first time in 2015 by -1.1.

Despite the downward trend, China retained top spot as the largest source market with 104,106 visitors as of April, representing a market share of 23 percent.

Arrivals from Europe now account for 50 percent of tourists.

The government had set a target of 1.5 million visitors in 2016, aided by the ‘Visit Maldives Year 2016’ campaign and promotional activities.

However, citing the “latest available data of the tourism sector”, the central bank suggested in its economic review for May that “the risks to this outlook appears to be more towards the downside.”

The government had missed its target of 1.4 million arrivals in 2015.

The government had also missed its revenue target in 2015, but hopes to raise MVR21.5 billion this year. But the opposition has criticised a raft of proposed revenue raising measures – which aim to generate MVR4 billion in additional revenue – as “unrealistic.”