Maldives govt proposes slashing cigarette duty by half

President Dr. Mohamed Muizzu’s administration has presented legislation to the Parliament seeking to cut the import duty on cigarettes by half – less than two years after it raised taxes on tobacco products.

The amendment to the Import-Export Act, sponsored by Komandoo MP Mohamed Ibrahim, was presented at the Parliament floor on Monday morning.

Back in 2024, President Muizzu’s administration increased the import duty on cigarettes and beedi from MVR 3 to MVR 8 per stick, and the ad valorem tax from 50 percent to 100 percent.

But the new bill proposes reducing the import duty on cigarettes, beedi and heated tobacco products from MVR 8 to MVR 4, and the ad valorem tax from 100 percent to 30 percent.

The bill also proposes exempting import duty on products used to help quit smoking, such as nicotine gum and nicotine patches.

The 2024 decision to double the import duty on cigarettes had been part of sweeping changes by President Muizzu’s administration to crack down on smoking, which also saw the introduction of a ban on vapes and e-cigarettes, and a smoking ban on the post-2007 generation.

The anti-smoking measures earned Maldives global recognition, with a World No-Tobacco Day Special Recognition Award from the World Health Organization (WHO) for President Muizzu, and an Integrity Award from the Global Center for Good Governance in Tobacco Control (GGTC) for the Maldives.

Despite the global recognition for the measures, the ban on vapes and the subsequent doubling of import duty on cigarettes created an illegal market where vapes and cheaper brands of cigarettes are being smuggled in and sold in the Maldives. This has also resulted in the loss of millions of Rufiyaa in import revenue.

President Muizzu’s administration had continued to defend the tax hike, stating that public health far outweighed any financial loss.

But during a press briefing on May 31, Homeland Security Minister Ali Ihusan said the 2024 decision to double taxes on cigarettes had been a “difficult” one, and that the administration was considering lowering the import duty to MVR 4 per stick – something which he said was recommended by the World Health Organization (WHO).

The WHO has not made any official comment regarding the claim.

When questioned about the decision during a press briefing on June 1, President Muizzu insisted he wasn’t taking a U-turn on his strict stance on tobacco products, but was making “necessary changes”