Government proposes 50 percent reduction in import duty on tobacco products
The government has decided to propose an amendment to the Export-Import Act to slash the duty on tobacco products by 50 percent, a move that would reduce the fee on individual cigarettes and heated tobacco sticks from MVR eight to MVR four. This decision to reverse the recent duty hike within such a short period has sparked significant public backlash and widespread criticism of the administration's shifting policies.
The government has decided to reduce the import duty on cigarettes from eight Rufiyaa to four Rufiyaa per stick. | gettyimages
The government has submitted a proposal to the People’s Majlis to reduce the import duty on tobacco products by 50 percent.
The amendment to the Maldives Export-Import Act was submitted to Parliament on behalf of the government by Mohamed Ibrahim, the Member of Parliament for the Komandoo constituency.
The bill, introduced on behalf of the government, proposes to increase the import duty on cigarettes to four Rufiyaa per stick, while setting the ad valorem duty rate at 30 percent. Furthermore, the legislation seeks to grant duty exemptions for nicotine gum, nicotine patches, and other similar products specifically designed to assist in smoking cessation.
The bill proposes reducing the import duty on heated tobacco products—tobacco products designed to be consumed by heating rather than burning—from 50 percent to 30 percent. Additionally, it seeks to lower the specific tax per stick from eight Rufiyaa to four Rufiyaa.
Effective November 1, 2024, the government has implemented a significant tax hike on tobacco products, increasing the customs duty on cigarettes by 50 percent plus an additional eight Rufiyaa per stick. Similar increases have been applied to beedis, which now face a 50 percent duty hike along with an eight Rufiyaa charge per unit. Additionally, flavors used in e-cigarettes and other vaping devices are now subject to a 50 percent tax increase, supplemented by a specific duty of eight Rufiyaa per milliliter.
Furthermore, the duty on heated tobacco products—tobacco products designed to be consumed by heating without combustion—has been increased by 50 percent, with an additional levy of MVR eight per stick.
The government is facing heavy public backlash following a sudden "U-turn" on its decision to reduce the duty on tobacco products from eight Rufiyaa to four Rufiyaa. This policy shift comes less than a month after President Dr. Mohamed Muizzu explicitly stated that duties on cigarettes and tobacco products would not be lowered. Many citizens have taken to social media to express their concerns, with critics pointing out a recurring pattern of policy reversals by the current administration.
Furthermore, many have pointed out that attempting to reduce the prices of tobacco products after having recently increased them raises serious questions regarding the sincerity of the government's commitment to its anti-tobacco initiatives and the ban on vaping.
