Government bill to slash tobacco import duties by 50 percent sent to committee

The Parliament has accepted a government-sponsored bill to reduce the import duty on tobacco products by 50 percent and has forwarded the legislation to the Whole House Committee for further review.

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, submitted on behalf of the government, proposes to increase the import duty on cigarettes to 4 Rufiyaa per stick, while setting the ad valorem duty rate at 30 percent. Furthermore, the legislation seeks to eliminate import duties on nicotine gum, nicotine patches, and other similar products specifically designed to assist in smoking cessation.

The bill proposes a reduction in the import duty on heated tobacco products—tobacco products designed to be consumed by heating without combustion. Under the proposal, the current 50 percent ad valorem tax would be lowered to 30 percent, while the specific tax of MVR 8 per stick would be halved to MVR 4.

Debate on the bill commenced and concluded on Wednesday, followed by a vote on whether to accept the legislation for further consideration. The bill was accepted by the Parliament with a unanimous vote from all 49 members present. Following its acceptance, the bill has been forwarded to the Committee of the Whole House for detailed review.

Effective November 1, 2024, the government has decided to increase the import duty on cigarettes by 50 percent, plus an additional 8 Rufiyaa per cigarette. Similarly, the duty on bidis has been raised by 50 percent, with an added charge of 8 Rufiyaa per bidi. Furthermore, electronic cigarettes and liquid flavors used in tobacco heating devices will now incur a 50 percent duty increase, along with an additional 8 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, along with an additional levy of 8 Rufiyaa per stick.

The government is facing intense public backlash following a sudden "U-turn" on its decision to slash the duty on tobacco from 8 MVR to 4 MVR. This policy reversal comes less than a month after President Dr. Mohamed Muizzu explicitly stated that duties on cigarettes and tobacco products would not be reduced. Public outcry has surged across social media platforms, with many citizens expressing deep concern over the move. Critics are increasingly accusing the administration of a pattern of inconsistent decision-making, noting that the government appears to be frequently reversing its own policies.

Furthermore, many observers have pointed out that attempting to lower the prices of tobacco products after initially increasing them raises serious questions regarding the sincerity of the government's commitment to its anti-tobacco initiatives.