Parliament approves import duty hikes

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.

Related to this story

Government scraps plan to impose import duty on staple foodstuff

Parliament approves state budget for 2015 with 60 votes in favour

Government proposes import duty hike for oil, staple foodstuffs


Transport authority to destroy impounded vehicles

The transport authority has declared it will destroy all vehicles impounded by the police in their tow yard, despite a notice from parliament’s government oversight committee ordering it not to destroy the vehicles.

Speaking to the press today, chairman of the transport authority Abdul Rasheed Nafiz said that he did not believe that parliament could give the authority such an order as the motor vehicle act required the transport ministry to destroy impounded vehicles if the owner did not pay the fines within a certain duration.

Nafiz told the press that if MPs were worried about citizen’s property being destroyed they should amend the motor vehicle act to prevent the impounding and destruction of vehicles, or vote on the matter.

On June 24, police announced the impounded vehicles in the police tow yard would be destroyed if the owners did not claim them.

Police Spokesperson Ismail Ali told Minivan News that owners had already been given three months to reclaim their vehicles.

“The three month duration expired last Friday,’’ Ismail said. ‘’The tow yard is full now and we need the land for other purposes.’’

According to Ismail this is the first time  police will destroy vehicles since the motor transport act came in to effect.

‘’These vehicles that we are going to destroy have been here since 2008,’’ he said.

He said a committee consisting of members from Male City council, police, media, and transport authority will decide how to destroy these vehicles.

‘’The committee will give instructions to police,’’ he added.

Following the decision by police, Maldivian Democratic Party (MDP) MP Ahmed ‘Bonda’ Rasheed staged a one-man protest inside the parliament chamber.

The Speaker Abdulla Shahid repeatedly asked Rasheed to take his seat, and after several hours asked security officials to remove him from the parliament chamber.

Later that day the issue was filed at the government oversight committee and the committee passed a motion to send a notice to the transport authority requesting it not destroy the vehicles.


Police seize 237 driving licences in one week following traffic violations

Police have withheld the driving licences of 237 people following a spate of traffic violations over a period of one week, local media has reported.

As part of a police operation conducted from March 12 to 18, a further 422 people were fined for traffic violations, statements were taken from 167 individuals who were not carrying their licences and 160 vehicles received stickers for parking against the traffic regulation.

During the police operation, 28 accidents were reported out of which investigations had been completed for 15 cases.


Cabinet pledges cuts to duties on green tech

Cabinet has pledged to remove all import duties on vehicles powered with electrical or renewable energy sources to try and boost its own green commitments and reduce a national reliance on fossil fuels.

As part of this commitment, the government is also expected to cut import charges on solar panels and batteries that can be used as alternate energy sources for marine vehicles in the country.

According to the cabinet’s recommendations, vehicles and power sources exempt from import charges will require documents from the country’s Environmental Protection Agency to accredit any claimed eco-friendly benefits.

The move is tied to the country’s aims of trying to become carbon neutral by 2020, a goal President Moahamed Nasheed has previously claimed would be a disaster for the nation if not achieved – although the government is yet to outline the exact measures it will take to achieve these aims.

Cabinet’s decision to waive the import charges was made at a meeting held yesterday regarding funding developments to try and encourage greater use of renewable energy sources in everyday life and business. These measures include strategies such as subsidising 50 laari for every unit of electricity produced by renewable energy means.

Aside from this environmental focus, the cabinet was also reported to have taken the decision to cut duties on imports of raw materials and agricultural equipment that could be used to bolster fishing and poultry production to reduce the nation’s overall reliance on imports.

Recommendations were also put forward to develop 15,000 square feet of land in Hulhumale’ into a detoxification and drug rehabilitation centre supported from international donor aid.


Vehicle-free zone planned for Male’

Transport Authorities are said to have announced that as of later this month, the use of vehicles will be restricted in the Lonuziyaaraikolhu area of Male’ – situated in the southeast corner of the capital – following cabinet consultation on the issue.

According to Haveeru, Mohamed Latheef, Permanent Secretary of the Transport Authority of the Maldives, said that the vehicle-free zone is expected to come into force on 26 March and incorporate Raiyvilla Hingun in the northeastern corner of Henveiru Park and Ameenee Magu to the southwest of the area.

Latheef said that vehicles will still be able to travel around Moonlight Hingun and Hithigas Magu even after the restrictions are put in place.

According to the report, the decision was made in collaboration with Male’ City Council and is tentatively scheduled to launch in order to coincide with the World Wildlife Fund’s (WWF) Earth Hour initiative. The scheme attempts to encourage citizens and organisations around the world to turn all their lights off for an hour to try and drastically cut global energy usage and the planet’s combined environmental footprint.