Revenue from the Goods and Services Tax (GST) increased by nine percent to MVR 8.6 billion. According to the Finance Ministry, the government has collected a total of MVR 19.1 billion so far this year, out of the projected MVR 40.4 billion outlined in the annual budget. Of this amount, MVR 14.8 billion was generated through various taxes.

GST remains the primary source of tax revenue, with collections rising by MVR 708 million compared to the same period last year. GST includes two components: Tourism GST (TGST) and General GST (GGST).

Revenue from TGST reached MVR 6.02 billion, while GGST collections increased to MVR 2.5 billion from MVR 2.2 billion during the same period last year.

Last July, the TGST rate was increased from 16 percent to 17 percent. The state budget estimates TGST revenue of MVR 11.5 billion for this year, based on an expected 2.5 million tourist arrivals. However, since the outbreak of conflict in the Middle East on February 28, tourist arrivals have sharply declined. Data from the Tourism Ministry shows a 20.7 percent drop in March arrivals compared to the same month last year, followed by a 24.4 percent decrease in April.

Tourist numbers began to stabilize afterwards, with May experiencing a smaller decline of 1.7 percent compared to the previous year.

Meanwhile, global oil prices have surged due to the conflict, and disruptions in transportation have increased the cost of imported goods in the Maldives, which is heavily reliant on imports.