Parliament passes bill reducing, eliminating import duties

Parliament today passed a bill proposed by the government under its economic reform package to amend the Export-Import Act of 1979 to reduce and eliminate import duties for a wide range of goods.

The amendment bill was passed today with unanimous consent of 60 MPs present and voting.

Among the items for which custom duties would be eliminated include construction material, foodstuffs, agricultural equipment, medical devices, passenger vessels and goods used for tourism services.

However, the bill was passed with an amendment to charge a Rf10,000 (US$650) annual fee for passenger vessels and no change to tariffs for spare parts. While import duties were eliminated for construction material such as cement, glass, tin, aluminium, plywood and plastic fittings, an import duty of five percent will be levied on tiles, which was reduced from the previous 25 percent.

Import duty was reduced to five percent for furniture, beds and pillows as well as cooking items made from base metals. Other kitchen utensils had duties reduced to 10 percent.

While import duties were eliminated for most fruits and vegetables, 15 percent would still be levied on bananas, papaya, watermelon and mangoes as a protectionist measure for local agriculture. Areca-nuts would have duty reduced from 25 percent to 15 percent.

Import duties for tobacco would be hiked from 50 percent to 150 percent. However an amendment proposed by the government to raise import duties for alcohol and pork from 30 to 70 percent was defeated at committee stage.

A total of Rf2.4 billion was projected as income from import duties in the 2011 budget. With the passage of the amendment bill today and ratification by the President, the figure is expected to decline to Rf1.8 billion next year. The shortfall is to be covered by Rf2 billion in tourism goods and services tax (T-GST) and Rf 1 billion as general goods and services tax (G-GST) revenue.

MDP parliamentary group leader MP Ibrahim Mohamed Solih was not responding to calls at the time of press.

PPM Media Coordinator and Vili-Maafanu MP Ahmed Nihan told Minivan News today that all members of the party’s parliamentary group voted in favour of the bill and stressed the importance of “providing relief to businesses” paying GST on top of custom duties.

“By this vote today, we have answered the MDP’s allegations that we tried to stop Majlis sittings to prevent this bill from being passed,” he said.

Speaker Abdulla Shahid and the ruling party should bear full responsibility for the cancellation of nine sittings over three weeks, Nihan said, as the dispute over the convicted Kaashidhoo MP’s attendance could have been avoided.

The PPM council member condemned the ruling party’s “efforts to blame the Majlis cancellation on opposition parties.”

“PPM will support any measure that will provide relief to the public,” he said, adding that the party would “very closely monitor” pricing by retailers following the elimination of import duties.


6 thoughts on “Parliament passes bill reducing, eliminating import duties”

  1. This is a bold move by the Government which would be positive if implemented properly. One of the results could be cutting down staff at Maldives Customs, the majority of whom are employed to collect revenue.

  2. I cannot understand the rational to not alllow long-line fishing vessels to Maldives waters as they compete with loca fishermen but then to allow passengers vessels to be imported at zero tax and for them to compete against Maldivian safari boats. Fishing boats needs to protected but local safari boats need not be protected?

  3. This would work if the GST functions well. Period.
    But with GST, prices would never come down.

  4. I respectfully request MPs to rethink the hike in tobacco prices.

    If not then please expect a parallel market to form very soon along with the surrounding social ills that come with every black market.

  5. Adaalath how about a protest for not banning Pork and Alcohol. Perhaps it would have been too much of a burden on the committee members if they increased the tax from 30 to 70 pc.

  6. The Majlis can’t hike the customs duty for pork and alcohol since this will reduce income for resort openers and owners.


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