Gov’t to increase import duty on tobacco products
A large-scale, technically accepted, comprehensive national campaign will be launched to help those addicted to tobacco, quit
Smoked cigarette filters
The government is to implement additional measures to discourage tobacco consumption among the public.
Instead of relevant government agencies announcing important government decisions, the president directly revealed this on social media.
President Dr. Mohamed Muizzu took to social media platform ‘X’ on Tuesday, announcing that he would be sending an amendment to the People’s Majlis within the week to increase the import duty on tobacco products.
The import duty on tobacco products is to be hiked from 1 November 2024.
Muizzu stated that under Section 24 of Article 7 of the Import Law, it has been decided to increase the specific rate of import duty on cigarettes and beedi from MVR three to MVR eight, and to increase the ad valorem rate on these products by 50 percent.
In addition to this, he highlighted that special measures are to be implemented in a bid to strengthen the role of enforcement agencies in preventing smoking in public places.
The president also noted that a large-scale, technically accepted, comprehensive national campaign will be launched to help those addicted to tobacco, quit.
The president has sought cooperation and assistance of all citizens to make the Maldives a society free of tobacco use.
While the government has decided to increase taxes on tobacco products, due to increased government operational costs and financial constraints, the government has already submitted three bills to the People’s Majlis to increase fees related to tourism and airport to address financial difficulties and manage increasing debt.
One of these proposals is to amend the Goods and Services Tax Act. Under this amendment, it has been proposed to increase the Tourism Goods and Services Tax (TGST) from 16 percent to 17 percent from June 2025.
Additionally, it has been proposed to double the Green Tax collected from tourists. Under this change, the tax would be increased from USD six to USD 12 per day for places currently charging USD six, and from USD three to USD six for places currently charging USD three per day.
In addition to increasing tourism-related taxes, the government has also submitted a bill to amend the law on taxing passengers departing from Maldivian airports. The bill proposes a significant increase in departure tax for foreign passengers starting from December 2025.
It suggests increasing the tax for foreign economy class travelers from USD 30 to USD 50, and for business class travelers from USD 90 to USD 120. The largest increase is proposed for first-class or private jet travelers.
The tax for first-class passengers would increase from USD 90 to USD 240, and for private jet passengers from USD 120 to USD 480. Further, the bill proposes to increase the Airport Development Fee to the same amount.
As the government works to increase taxes, the World Bank recently expressed concern about the Maldives’ delay in implementing necessary financial sector reforms.
According to a report released by the World Bank in October, while the country's reserves were sufficient for 1.4 months of imports at the end of 2023, it has now fallen to cover only one month of imports.
The report also states that the usable reserves have decreased from USD 179 million to USD 61.2 million during this period.
