Government Proposes Cutting Cigarette Import Duty by Half in New Bill

The Maldivian government has submitted a bill to the People’s Majlis seeking to significantly reduce the import duties levied on cigarettes and related tobacco products. Presented by Komandoo Constituency MP Mohamed Ibrahim, the proposed amendment to the Import-Export Act aims to halve the current duty on cigarettes. Under existing laws, a duty of USD 0.52 is charged per cigarette; the new proposal would lower this amount to USD 0.26. The scope of the tax reduction extends beyond standard cigarettes. The amendment to Article 7 of the Act proposes the same reduction to USD 0.26 for rolled cigarettes and heated tobacco products—items designed to be heated rather than burned—which currently carry the same USD 0.52 levy. In a move to support public health initiatives, the government is also proposing a complete import duty exemption for nicotine replacement therapies. Products specifically designed to assist individuals in quitting tobacco, such as nicotine patches and nicotine chewing gum, would no longer be subject to these duties. However, the policy shift comes with a notable fiscal trade-off. According to the bill's explanatory notes, reducing these duties will lead to a decrease in projected government revenue. If the amendments are implemented starting July 1, the state expects a revenue shortfall of approximately USD 13.59 million compared to original budget forecasts. If the bill is passed by the Maldivian Parliament and ratified by the President, it will officially become law. The legislation further mandates that all relevant customs regulations and procedures must be revised and published within 30 days of the law taking effect.