The People’s Majlis yesterday passed government-sponsored amendments to the Export-Import Act to raise import duties on 17 items from April 2015 onward.
The amendments (Dhivehi) submitted on behalf of the government by Maldives Development Alliance (MDA) MP Mohamed Ismail were approved with 49 votes in favour and 16 against.
Following ratification by the president, import duties for tobacco would be raised from 150 to 200 percent and from 90 laari to MVR1.25 for a single cigarette.
Finance Minister Abdulla Jihad told parliament’s budget review committee last month that the government anticipated MVR533 million (US$34.5 million) in additional income from import duties.
Among other items, custom duties for luxury cosmetics and perfume would increase from the current zero rate to 20 percent.
Additionally, duties for liquor and pork would be raised to 50 percent and a 200 percent custom duty would be levied for land vehicles such as cars, jeeps, and vans.
While the day prior to the budget’s approval the cabinet’s economic council reversed a decision to impose a 10 percent tariff on staple foodstuffs such as rice, flour, and sugar, the import duty for oil or petroleum products was raised from the current zero rate to 10 percent.
About 30 percent of the Maldives’ GDP is spent on importing fossil fuels. In 2012, US$486 million was spent on oil imports, and the figure is estimated to rise to US$700 million by 2020.
According to the Maldives Customs Service, of the MVR7.2 billion (US$466.9 million) worth of goods imported in the first quarter of 2014, one-third was spent on petroleum products.
The latest monthly economic review from the Maldives Monetary Authority noted that “the price of crude oil fell by 4 percent in monthly terms and by 12 percent in annual terms and stood at US$95.9 per barrel at the end of September 2014,”
Revising import duties was among several revenue raising measures in the record MVR24.3 billion (US$1.5 billion) state budget for 2015 currently before parliament.
The forecast for additional revenue for the 2015 budget was MVR3.4 billion (US$220 million), including US$100 million expected as acquisition fees for investments in special economic zones and MVR400 million (US$25.9 million) from the sale and lease of state-owned land.
The other measures included introducing a green tax of US$6 per night in November 2015 and leasing 10 islands for new resort development.
Tariffs were last revised in April this year after parliament approved import duty hikes for a range of goods proposed by the government as a revenue raising measure.
During last month’s parliamentary budget debate, opposition Maldivian Democratic Party (MDP) MPs strongly criticised the proposed tax hikes, contending that the burden of higher prices of goods and cost of living would be borne by the public.
The current administration’s economic policies – such as waiving import duties for construction material imported for resort development as well as luxury yachts – benefit the rich at the expense of the poor, MDP MPs argued.
Source : minivannews.com