State revenue and grants reached MVR 22.4 billion during the first six months of 2026, driven by higher tax collections, particularly from corporate income tax and goods and services tax (GST).

The  Ministry of Finance and Public Enterprises' latest Weekly Fiscal Developments Report stated that revenue increased by MVR 2.1 billion, or 10.4 per cent, compared with MVR 20.3 billion recorded during the same period in 2025. Tax revenue accounted for the largest share of government income, rising by MVR 2 billion, or 13 per cent, to MVR 17.3 billion.

The Ministry attributed the increase largely to stronger corporate income tax collections, supported by higher business activity and the timing of income tax payments. Corporate income tax generated MVR 1.7 billion, an increase of MVR 97.7 million, or 6.2 per cent, compared with the corresponding period last year.

GST also remained a key contributor to Government revenue, generating MVR 9.6 billion, up MVR 835.4 million, or 9.6 per cent, from the same period in 2025. This included MVR 2.9 billion from General GST and MVR 6.6 billion from Tourism GST (TGST).

Government expenditure during the same period totalled MVR 23.4 billion, an increase of MVR 4.2 billion, or 21.7 per cent, compared with MVR 19.2 billion a year earlier. The increase was mainly driven by higher spending on salaries and allowances, as well as subsidies to maintain the prices of essential goods and services amid rising global oil and commodity prices linked to the conflict in the Middle East.

The Ministry said the expenditure reflects the Government's commitment to maintaining uninterrupted public services and implementing civil service salary adjustments. Spending on salaries and wages reached MVR 3.7 billion, up 13.9 per cent, while total expenditure on salaries and pensions stood at MVR 8 billion. Recurrent expenditure amounted to MVR 20.3 billion, with capital spending on development projects reaching MVR 3 billion, reflecting continued investment in infrastructure development.

Despite the increase in expenditure, the Government recorded a primary surplus of MVR 1.7 billion, indicating that ordinary revenue was sufficient to cover expenditure excluding debt repayments and interest costs. However, the overall fiscal balance remained in deficit, with a budget shortfall of MVR 975.9 million.