Maldives president approves new tax law, raising e-cigarette import tax to 200%

Maldivian President Dr. Mohamed Muizzu has approved an amendment to tax cigarettes and e-cigarettes, according to Raajje on November 3.

In mid-October, the parliament passed a proposal to tax e-cigarettes and cigarettes with a vote of 65 in favor.

President Muizzu approved the 19th amendment to the Export-Import Act, introducing significant changes to import taxes on tobacco and e-cigarettes. 

The amendment modifies Section 5 of the Export-Import Act, addressing import regulations for tobacco products, covering processed tobacco, tobacco alternatives, e-cigarettes, heated tobacco products, and their components. Adjustments were also made to Chapter 24 of Section 7.

Under the new regulations, all products in the general and processed tobacco categories will incur a 200% tariff, with exceptions for specific items. Cigarettes, Beedi (Indian hand-rolled cigarettes), and flavored chemicals for e-cigarettes, as well as heated tobacco products and consumables, will be taxed at 50%, with an additional charge of 8 Maldivian Rufiyaa (MVR) (USD 0.52) per unit or milliliter.

The president also announced amendments to Chapter 85 of Section 7, which pertains to electronic machinery, devices, and components, imposing a 200% import tax on e-cigarettes, vaping devices, and heated tobacco products. 

Other key changes include a requirement for all relevant rules and regulations to be updated, formulated, and published in the government gazette within 30 days of the amendment taking effect, which is scheduled for November 1, 2024.

Previously, the president announced on the social platform X a ban on importing e-cigarette devices and components, effective November 15, 2024. From December 15, 2024, the use, possession, production, sale, advertising, and free distribution of e-cigarette devices will be prohibited in the Maldives.

According to the new regulations, all products under the general and processed tobacco product category will be subject to a 200% tariff, with some specific items exempt. Flavouring chemicals for cigarettes, Beedi (Indian hand-rolled cigarettes), and e-cigarettes, as well as heating tobacco products and their consumables, will be subject to a 50% tariff, at a rate of 8 Maldivian Rufiyaa (MVR) (0.52 USD) per stick or per milliliter.

The president also revealed that Section 7, Chapter 85 of the amendment will impose a 200% import tax on electronic machinery, equipment, and parts, specifically targeting e-cigarettes, vaporizers, and heated tobacco products. 

Other key amendments include the requirement for all relevant rules and regulations to be developed or updated and published in the government gazette within 30 days of the amendment coming into effect. The amendment will officially take effect on November 1, 2024.

Previously, the President announced on the social media platform "X" that the import of e-cigarette devices and their components would be banned, with the ban taking effect on November 15, 2024. Starting from December 15, 2024, the use, possession, production, sale, promotion, and free distribution of e-cigarette devices will be prohibited in the Maldives.