Monday, May 6, 2013

Spend what you have


Given the utilized resources in the country, are able to raise Rf10 billion as government revenue within a year. That’s the maximum we can spend on all the expenditures of the state; including the executive, judiciary, parliament, and other independent institutions. We cannot afford as a country to spend beyond Rf10 billion in any year given the present circumstances. However,  when we are able to increase the number of economic activities, by making new investments on resorts, hotels, and others, then we may be able to raise additional revenue through tax, and then we can spend more. Trying to increase existing tax rates will not be a solution, as private businesses will be discouraged to make new investments, and also it may affect our tourist arrival, as our tourism product is not as inelastic as we may think. 

Our present behavior of spending beyond our means, have led to accumulation of short term debt exceeding Rf6 billion from local banks. Recently, government has also started raising finance from private businesses by selling T-bills to private companies other than commercial banks. Again we are restricting the amount that would have been invested for future incomes. What is more alarming is that government is borrowing at more than 8.5%, for such short-term.

We cannot continue like this for long. We need to reduce expenditure, so that it can match with what we get through tax revenue. 

5 comments:

  1. sounds like the Maldives government is broke.

    ReplyDelete
  2. previously you have been saying that our tourism is inelastic, while talking about introducing tax.... am i right... I can understand, if you say the changes occour due to change in our tourism markets. zk

    ReplyDelete
  3. Guess it's too early to increase the tax leaving aside the "plasticity" of tourism.

    ReplyDelete
  4. Hello Everybody,
    My name is Mrs Sharon Sim. I live in Singapore and i am a happy woman today? and i told my self that any lender that rescue my family from our poor situation, i will refer any person that is looking for loan to him, he gave me happiness to me and my family, i was in need of a loan of S$250,000.00 to start my life all over as i am a single mother with 3 kids I met this honest and GOD fearing man loan lender that help me with a loan of S$250,000.00 SG. Dollar, he is a GOD fearing man, if you are in need of loan and you will pay back the loan please contact him tell him that is Mrs Sharon, that refer you to him. contact Dr Purva Pius,via email:(urgentloan22@gmail.com) Thank you.

    BORROWERS APPLICATION DETAILS


    1. Name Of Applicant in Full:……..
    2. Telephone Numbers:……….
    3. Address and Location:…….
    4. Amount in request………..
    5. Repayment Period:………..
    6. Purpose Of Loan………….
    7. country…………………
    8. phone…………………..
    9. occupation………………
    10.age/sex…………………
    11.Monthly Income…………..
    12.Email……………..

    Regards.
    Managements
    Email Kindly Contact: urgentloan22@gmail.com

    ReplyDelete