Import duty drop not related to China FTA: Saeed

Minister of Economic Development and Trade Mohamed Saeed has said that there is no relation between the decrease in import duties and the implementation of the Maldives-China Free Trade Agreement.

He said that since the FTA was implemented last month, only a one percent decrease has been recorded in import duties.

Speaking at last night's 'Ahaa' Forum, Saeed said that when goods worth MVR 1 billion is brought in from China, businesses will see significant profit even if there is a slight drop in duties.

"With the FTA, these figures have been brought to zero percent. Meaning, if a guest house is being built and the material is brought from China, it will be duty free. This is a huge benefit," he said.

The Economic Ministry has said that while goods worth over MVR 1 billion has been imported since January 1 to date, goods worth MVR 34 million of this was under the FTA agreement. The duty concession for this was MVR 2.2 million which is 1.6 percent of the total import revenues.

"Goods being imported from China has increased by 40 percent compared to last year. The reasons for this include increase in import of construction industry materials, vehicles, and material for projects. In the future, the FTA will lead to strengthening economic activities and expanding businesses," Saeed told Mihaaru News, adding it would lead to the public being able to purchase goods at decreased prices.

Over the past month, State revenue has decreased by 19 percent, with 64 percent lost through import duties alone. Last year, MVR 384 billion was received as import duties, while this year's figures stand at MVR 138 million, with a loss of MVR 247 million.

Revenues so far this year are at MVR 3.7 billion, which is MVR 874 million less than last year.

While the State revenue has decreased, government expenditure has also decreased so far this year by 29 percent. Government expenditure this year currently stands at MVR 3.2 billion.