Maldives Inland Revenue Authority (MIRA) on Monday, revealed that a 26 percent decrease in profits generated by state-run companies was recorded during March 2020.
According to MIRA's monthly statistics, Maldives collected MVR 1.11 billion as state revenue during the month, a figure 20.3 percent short on government projections.
In light of the restrictive measures implemented over the ongoing COVID-19 pandemic, MIRA recorded an 11.1 percent drop in tourist arrivals.
The highest revenue in March was recorded from Goods and Services Tax (GST) with MVR 637.67 million, accounting for 57.3 percent of all state income. GST is followed by MVR 131.65 million collected from islands leased for tourism purposes. Business Profit Tax (BPT) stood at MVR 81.38 million, while Green Tax generated MVR 74.04 million.
Maldives also received MVR 59.17 million from the Airport Development Fee (ADF) and MVR 128.68 million in other taxes.
The country also received USD 49.2 million during the month.
Governor of Maldives Monetary Authority (MMA) Ali Hashim on April 8, declared that local economic growth might reach negative nine percent in the estimated worst case scenario of the economic recession caused by the virus.
The "worst case scenario" is that the whole country stays under lockdown until the last quarter of the year, with no tourist arrivals. According to the Governor, a solution must be found in the tourism sector to improve the country's economic growth, as 30 percent of direct revenue and 60 percent of indirect revenue is generated by the industry alone.
Maldives economy is heavily reliant on its tourism sector. As over 70 percent of the country’s GDP is attributed to revenue generated by the tourism industry, Maldives’ economy continues to face severe repercussions due to travel restrictions imposed over the COVID-19 outbreak. It is estimated that the country will face a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency.
In a bid to counteract the financial impact of the COVID-19 pandemic on the local economy, Maldivian government introduced an economic relif fund with MVR 2.5 billion intended to prevent the closing down of local businesses and the loss of jobs. The administration has asserted that it will prioritize companies that do not terminate staff members in providing the recovery loans allocated for struggling businesses.