The parliament on Wednesday passed the amendment to the Export Import Act to hike the import duty of cigarettes and energy drinks, which, if ratified, would increase prices of cigarette packs by MVR 20 and energy drink cans by MVR 8.
The bill, lobbied on behalf of the government by its coalition partner Maldives Development Alliance (MDA)’s lawmaker Ahmed Amir, was passed with 50 parliamentarians voting in favour.
The debate over the bill was disrupted by lawmakers of main opposition Maldivian Democratic Party (MDP) going on strike on the parliament floor over the parliament rejecting an amendment suggested for the bill by MDP lawmaker Fayyaz Ismail. He had proposed to allocate five percent of the duties charged from cigarettes and energy drinks to organise public awareness programs and activities to discourage smoking in the community. MDP members declared that the reason for turning down the amendment was never stated.
MP Fayyaz had taken over the chair of the parliament speaker in protest while opposition lawmakers rebelled on the floor. Consequently, parliament speaker Abdulla Maseeh Mohamed was compelled to take a chair with the ministers to proceed with the session.
The parliament’s general committee and Economic Affairs Committee which had reviewed the bill had both approved to double the import duties of cigarettes and energy drinks.
The original bill had proposed to increase taxes of energy drinks and soft drinks to MVR 4.60 per litre. However, the final amendment changed the duty of energy drinks to MVR 33.64 per litre.
If the bill is ratified and put into effect, increases in prices will include hiking Red Bull cans from MVR 20 to MVR 28, and XL Energy Drink cans from MVR 15 to MVR 23.
Some changes made by the parliament to the bill include taking 75 laari (MVR 0.75) from each cigarette stick and charging 25 percent as an invoice value. Currently the average price of a cigarette pack is MVR 50, while a cigarette stick is MVR 2.50. However, the price of sticks will be hiked to MVR 3.50 should the president ratify the bill.
The government projects that the hike in cigarette tax will bring an additional revenue of over MVR 200 million to the state.
Meanwhile, the official statistics of Maldives Customs Service show that the Maldives earned a revenue of MVR 622 million last year with 497 million cigarettes imported. This is a higher record than 2015 during which 460 million cigarettes were imported.
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