Economic Minister Mohamed Saeed has said the decline in import duty revenue is not due to the Free Trade Agreement (FTA) with China.
The FTA, which exempts import duties on many Chinese imports, came into force on January 1. Some experts say the decline in revenue was caused by the FTA.
According to Saeed, relatively few goods were exempted from duty under the FTA and goods worth MVR 1 billion have been imported with a CIF value of MVR 34 million so far this year.
But only MVR 2.3 million was waived under the FTA, he said.
"It's one percent of total imports. So the revenue drop has nothing to do with the FTA. It's not related to the FTA," Saeed said.
Efforts are being made to explain the decline in import duty revenue to the public, he said.
“Our team worked hard to put it into a good perspective today,” he said.
Saeed further said Maldives is a low productivity, import dependent country and the import duty exemption under this agreement will benefit the local businessmen and the general public.
He said this would benefit different sectors including local tourism as the cost of setting up such a guesthouse would be much lower.
According to the latest figures from the Finance Ministry, import duty collections from January 1 to February 6 were MVR 246 million less than the same period last year. Total revenue also fell by MVR 874 million during the period.
The biggest policy proposed by the government to increase revenue in the budget for this year is a change in import duty. The government estimated that the increase in duty on cigarettes would generate an additional MVR 1 billion this year.
