Government to Scrap Import Duties on Small Business Raw Materials for Five Years From 2027

The government will eliminate import duties for five years on raw materials and production supplies utilised by micro, small, and medium enterprises (MSMEs), commencing 1 January 2027.

President Dr Mohamed Muizzu announced the policy shift last night, during the Maldives Expo 2026 Awards Ceremony, framing it as part of an overarching initiative to reduce manufacturing costs and incentivise local production.

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Under the planned mechanism, authorities will compile a definitive schedule of production inputs and materials imported by qualifying enterprises, which will subsequently be zero-rated at customs.

“In order to provide relief on raw materials and items imported into the Maldives by those working in the MSME sector, the government has decided to compile a comprehensive list of these items and set the import duty at a rate of 0 percent for a period of five years, starting from 1 January 2027,” President Muizzu said. “Therefore, the duties levied on these materials for working in that sector will be waived.”

Alongside the duty waivers, the President announced broader fiscal reforms, including raising the mandatory Goods and Services Tax (GST) registration threshold from the current MVR 1 million to MVR 1.5 million starting 1 January next year. 

President Muizzu confirmed that the statutory and regulatory amendments required to implement the higher threshold will be submitted in the coming days.

The administration also plans to establish a framework allowing private businesses to offset outstanding tax obligations directly against pending payments owed to them by state institutions.

“Undertaking such measures will provide relief to a vast number of parties,” the President noted.

The five-year duty waiver and tax adjustments form part of a wider set of economic incentives unveiled at the ceremony, alongside a three-year pilot programme scheduled to launch in January in Addu City that offers income tax exemptions, rental waivers on state-leased land, and relaxed foreign employment quotas.