Health Minister Geela Ali today declined to comment on the government's proposal to amend the Export-Import Act, which would effectively reduce the current market price of cigarettes by 50 percent.
During a session of the People’s Majlis, Vaikaradhoo MP Hussain Ziyad questioned the minister regarding the rationale behind the government's decision to lower cigarette prices, which the administration claims was based on advice from the World Health Organization (WHO). However, the Geela said that she had not attended the session prepared to answer that question.
"I did not come here today prepared to answer that question [regarding the reason for lowering cigarette prices]. Therefore, I will provide the answer to the Honorable Member at a later time," she said.
The government’s proposed amendment to the Export-Import Act seeks to reduce the ad valorem duty on cigarettes from 50 percent to 30 percent, while also slashing the specific duty per cigarette from MVR 8 to MVR 4.
The specific duty on cigarettes is set to decrease by 50 percent, while the ad valorem duty will see a 40 percent reduction.
The bill mandates that relevant regulations be amended in accordance with these changes within 30 days of its passage. As a result, cigarette prices are expected to drop shortly after the bill is enacted.
Furthermore, the government has proposed reducing the duty on heated tobacco products.
The government first announced the plan to reduce tobacco duties on June 6, coinciding with a local by-election. While the announcement was made by Home Minister Ali Ihusaan, the administration maintains that the decision to lower prices follows recommendations from the WHO.
Following previous tax hikes on cigarettes by the government, a black market for illicit tobacco emerged, with counterfeit cigarettes becoming widespread across the Maldives. These counterfeit products are currently available at prices much lower than the previous legal market rates.
