President Dr. Mohamed Muizzu has announced that the fiscal formula used to allocate block grants to local councils will be revised to account for both population and land size.
The President said the current formula, which is based mainly on population under Article 79 of the Decentralization of Administrative Areas Act, disadvantages councils in sparsely populated but geographically large islands. These councils often face higher costs for maintaining road networks and municipal services despite having fewer residents.
He explained that the change will address the financial difficulties faced by such councils and ensure a fairer distribution of resources. The revised formula will be incorporated into the 2026 state budget, which will be presented to Parliament.
The government believes that including land size in the formula will provide a more balanced allocation of block grants and strengthen councils’ ability to deliver services and development projects.
The President said the current formula, which is based mainly on population under Article 79 of the Decentralization of Administrative Areas Act, disadvantages councils in sparsely populated but geographically large islands. These councils often face higher costs for maintaining road networks and municipal services despite having fewer residents.
He explained that the change will address the financial difficulties faced by such councils and ensure a fairer distribution of resources. The revised formula will be incorporated into the 2026 state budget, which will be presented to Parliament.
The government believes that including land size in the formula will provide a more balanced allocation of block grants and strengthen councils’ ability to deliver services and development projects.
