Government proposes tobacco import duty hike to 300 percent

Minister of Finance Abdulla Jihad has said that the government has decided to increase the tax on tobacco to 300 percent, to reduce tobacco use among the public.

Speaking at the Budget Committee today regarding the categories of government income included in the Projected State Budget for 2015, Jihad said that the import duty on tobacco would be increased form 150 percent to 300 percent.

He said that in addition, the import duty on vehicles would be increased from 100 percent to 150 percent, and import duty would be introduced for perfumes, at 10 percent.

“The items for which duty would be revised include vehicles, fuel, perfume, tobacco; and energy drinks, rice, sugar, and flour to some extent. Details regarding his would be provided once they are finalised by the Economic Council,” said Jihad.

He added that the idea was to increase tax on luxury goods, and products that are harmful to the environment and public health.

Jihad said that the income from import duty for 2015 is estimated at MVR 3.4 billion, which would be collected from five main categories. The categories are changes to import duty, introduction of green tax, income from the Special Economic Zone (SEZ), long-term lease, and extension of resort lease periods.