The incumbent administration of President Dr. Mohamed Muizzu has been making significant changes to tobacco taxes since 1 November 2024.

Notable changes include increasing the specific rate of import duty on cigarettes and beedis from MVR three to MVR eight; resulting in a MVR five increase per cigarette and increasing the ad valorem rate on cigarettes and tobacco products from 50 percent to 100 percent.

With these changes by the government, the price of a pack of cigarettes rose to MVR 240.

With this massive price surge, as general dissatisfaction began to spiral, President Muizzu started to sugarcoat the situation, trying to portray it as something he did due to his “great concern” for public health.

During his speeches across multiple platforms, President Muizzu has been working very hard to show that revenue from cigarettes is not something the government seeks for the purpose of generating income.

As such, on the night of January 21, while speaking to the people of Ungoofaaru, Muizzu said that the revenue from tobacco taxes is not income the government relies on and that the Finance Ministry will not include that revenue in its calculations.

Later, on February 6, in the presidential address, he said that if there is any additional revenue from the change in cigarette prices, it has been decided to spend it entirely on taking steps to prevent diseases caused by tobacco use. The president said that revenue from tobacco will be used to run preventive healthcare programs and projects to discourage tobacco use.

Despite publicly claiming that the tobacco tax hike was not intended to boost revenue, the truth emerged in the minutes of the Budget Committee discussions for the state budget 2025, at the People’s Majlis.

The Auditor General's comments in the Budget Committee also clearly show that the import duty on cigarettes and beedis was increased from MVR three to MVR eight, with the change implemented in November 2024, to increase state revenue.

The Auditor General said that measures to increase state revenue were proposed in the budget, estimating an increase of MVR 6.9 billion. He noted that seven measures were proposed for this. The Auditor General highlighted in the Budget Committee meeting on 14 November 2024 that these seven measures involve changes to various laws, regulations, and policies, some of which have already been completed through legal amendments.

While the budget estimates state revenue to increase to MVR 39.7 billion from 2024 to 2025, Finance Minister Moosa Zameer himself has stated that increasing tobacco taxes is among the seven main measures proposed by the state to increase revenue.

It was further revealed that cigarette duty was increased to boost government revenue from comments made by Ahmed Nazim, Deputy Speaker of the Parliament representing the main ruling People’s National Congress (PNC), in the Public Accounts Committee last Monday. He very clearly stated that state revenue declined so sharply in January this year because, prior to the duty increase, a large quantity of cigarettes was imported into the country, and as that stock has not been depleted, cigarette imports have slowed after the duty increase, resulting in the government not receiving the expected revenue from cigarettes.

From setting a target to obtain nearly a billion Maldivian Rufiyaa from tobacco products, to rising duties and making cigarette prices unaffordable, the president continues to spin countless stories to portray his commitment to “public health”. However, every time he speaks in that vein, the truth only continues to unfold, exposed by the very people in his government.