In a significant move, the Maldivian government has confirmed that tobacco products and cigarettes will not be exempt from import duties under the Free Trade Agreement (FTA) with China. Economic Minister Mohamed Saeed’s written response to North Galolhu MP Mohamed Ibrahim’s inquiry underscores the country’s stance on maintaining revenue streams from these products.
The minister clarified that the duties on Chinese imports would be calculated based on the value of the items, and the exact figures could only be determined once the transactions are completed. This decision comes as a departure from the previous administration’s approach, which had not implemented the FTA signed in 2014 during former President Abdulla Yameen Abdul Gayoom’s tenure.
The current government, led by President Ibrahim Mohamed Solih, has now enforced the FTA, which took effect in January 2025. Officials have argued that the agreement will primarily benefit small and medium enterprises by reducing import costs on various goods. However, concerns have been raised regarding potential revenue losses from reduced import duties on Chinese goods.
Addressing these concerns, Minister Saeed reiterated that the total impact would only become clear once the trade volumes under the FTA are established. He emphasized that the revenue generated from the duties on tobacco and cigarettes would depend on the volume of imports from China.
The decision to maintain import duties on tobacco and cigarettes aligns with the Maldives’ broader public health agenda. By retaining these duties, the government aims to balance the economic benefits of the FTA with its commitment to promoting healthier lifestyles and reducing the negative impacts of tobacco consumption.
The enforcement of the China-Maldives FTA marks a significant milestone in the country’s economic relations with its regional partner. As the Maldives continues to navigate the complexities of this agreement, the government’s stance on maintaining import duties on tobacco and cigarettes reflects its desire to strike a balance between economic growth and public health concerns.