Parliament Reduces Cigarette Import Duty to MVR 4 Per Unit in Reversal of 2024 Tax Hike

Parliament has approved a reduction in import duty on cigarettes from MVR 8 to MVR 4 per unit, following a unanimous vote in favour of amendments to the Maldives Export-Import Act.

The bill, submitted by the government in June through Komandoo MP Mohamed Ibrahim, was passed with the support of all 68 members present. Although three MPs from the MDP did not take part in the vote, the committee stage saw unanimous approval, with 69 members supporting the bill during Monday’s committee meeting, including members from across party lines.

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Under the revised law, the import duty on cigarettes returns to MVR 4, down from the MVR 8 rate introduced in November 2024. The amendment also reduces duties on beedi and heated tobacco products to MVR 4.

The bill additionally removes import duties on nicotine replacement products, including nicotine chewing gum and patches, which are used for smoking cessation.

The change is expected to reduce projected import duty revenue in the state budget. The revised rates will take effect once the bill is ratified by the President, after which implementing regulations must be updated and published within 30 days.

The November 2024 tax revision had raised cigarette duty from MVR 3.30 to MVR 8, a move that led to a sharp increase in retail prices. A pack of cigarettes that previously sold for around MVR 110 rose to approximately MVR 250 following the change.

The government has stated that the latest reduction aligns with advice from the World Health Organization and forms part of broader tobacco control efforts.

However, the policy has drawn political debate. During parliamentary discussions last week, opposition MPs questioned the rationale behind the reduction. Kendhoo MP Mauroof Zakir argued that the earlier tax increase had encouraged some smokers, particularly younger people, to turn to illegal and unregulated alternatives, contributing to a rise in the black market and reduced government revenue.

He also raised concerns over the level of research and consultation conducted prior to the 2024 duty increase.

The government maintains that the revised approach is intended to support smoking cessation and promote healthier lifestyle choices by adjusting price incentives and improving access to cessation products.

Alongside tax policy changes, authorities have introduced wider tobacco control measures in recent years, including restrictions on vaping products and a generational ban aimed at reducing youth exposure to tobacco.

A national anti-tobacco campaign launched on 27 June also continues, focusing on awareness, cessation support and enforcement of existing regulations in collaboration with public institutions and civil society organisations.