Government submits amendment to lower cigarette duty; first reading on Monday

The government, after raising the price of cigarettes, has now submitted a bill to Parliament to lower it.

The government has sent a bill to Parliament to reduce the duty on cigarettes to MVR 4.

This new amendment to the Export‑Import Act was submitted by PNC MP for Komandoo, Mohamed Ibrahim on behalf of the government.

The first reading of the amendment is scheduled for Monday’s sitting.

The main purpose of this amendment is to encourage smoking cessation and to create economic opportunities that support healthier lifestyle changes.

Under the amendment, the duty on cigarettes, bidis and heated tobacco products is proposed to be reduced to MVR 4, with an ad valorem duty of 30 percent. Another key change in the amendment is to make health‑related products such as nicotine chewing gum and nicotine patches more easily available in the market.

Accordingly, the amendment states that the most important objective of this legislative change is to reduce the cost burden on the public for such health products by waiving import duty on all items that help people quit smoking.

With the increase in tobacco duty from November 2024, tobacco prices rose sharply. The price of a pack of cigarettes increased from around MVR 110 to MVR 250.

Since then, cigarette sales have declined, traders say. However, there has been a rise in the trade of self‑made cigarettes and concerns about smuggling.

Some who opposed the duty hike also argued that it reduced import duty revenue and affected state income. The government, however, defended the decision at the time, saying the health benefits outweighed the revenue impact.

Then on the 31st of last month, speaking at a press conference held to mark World No Tobacco Day, Home Minister Ali Ihusaan said the government had taken a difficult decision to raise the duty on tobacco products from MVR 3.50 to MVR 8.

However, at a press conference the following day, President Dr Mohamed Muizzu said the government had not taken a U‑turn on tobacco duty, and that the government would make the necessary adjustments to the duty on tobacco products.