Committee of the Whole House passes resolution to reduce import duties on tobacco, reversing a previous decision to increase them
Under this amendment, taxes on cigarettes, hand-rolled cigarettes, and heated tobacco products will be significantly reduced, marking a shift in the government's previously stringent tobacco control policy. The bill proposes to slash the specific duty on each cigarette and hand-rolled cigarette from MVR 8 to MVR 4, while simultaneously lowering the ad valorem tax from 100 percent to 30 percent.
Speaker of the People's Majlis, Abdul Raheem Abdulla, presides over a sitting of the Parliament. | People's Majlis
The Committee of the Whole House of the People's Majlis, has approved the proposed amendment to increase import duties on tobacco products, passing the government-sponsored bill without any further changes.
Following a debate on the proposed amendment to the Maldives Export-Import Act, the Whole House Committee of the People’s Majlis on Monday approved a reduction in duties on cigarettes, hand-rolled cigarettes, and heated tobacco products. The bill proposes to slash the specific duty on each cigarette and hand-rolled cigarettes from MVR 8 to MVR 4, while reducing the ad valorem tax from 100 percent to 30 percent.
The bill was initially introduced to Parliament on June 22. Following its referral to the Committee of the Whole House for review on June 24, the bill was passed during Monday's committee session with the unanimous support of all 69 members in attendance.
The bill was accepted on Wednesday with the unanimous support of all 49 members present during the vote.
This proposal to reduce tobacco duties comes less than two years after President Dr. Mohamed Muizzu’s administration significantly increased taxes on tobacco products. In 2024, the duty on each cigarette and hand-rolled cigarettes was raised from MVR 3 to MVR 8, while the ad valorem tax was hiked from 50 percent to 100 percent.
The government's policy framework includes increasing taxes, banning vapes and e-cigarettes, and prohibiting the sale of tobacco products to anyone born after 2007. In recognition of these policies, the World Health Organization (WHO) has presented President Muizzu with the "World No Tobacco Day Special Recognition Award." Additionally, the Global Center for Good Governance in Tobacco Control has conferred the "Integrity Award" upon the Maldives.
On the other hand, concerns have surfaced that the hike in duties and the ban on vaping have led to an increase in the smuggling of tobacco products, creating a black market for vapes and cheaper cigarette brands. Furthermore, the government is facing questions regarding the decline in import duty revenue and the practical effectiveness of these measures.
During Monday's committee meeting, members of the opposition MDP proposed summoning relevant state institutions to assess the potential impact on the national budget before passing the bill. Opposition members also maintained that several amendments were necessary. However, the chair stated that no formal motions had been submitted regarding these concerns. Consequently, the bill was passed in its original form as proposed by the government.
The government maintains that the reduction in tobacco duties is being implemented in accordance with recommendations from the World Health Organization (WHO).
