President Dr Mohamed Muizzu has ratified the 20th Amendment to the Export-Import Act of the Maldives (Act No. 31/79), lowering the import duty on cigarettes and related products roughly eighteen months after his government sharply raised the same duty. The People’s Majlis passed the amendment on Wednesday, 1 July 2026, and it took effect on ratification and publication in the Government Gazette.
Under the revised rates, the specific import duty on cigarettes, beedis, and consumables for heated tobacco products is set at MVR 4 per stick, with an ad valorem duty of 30 percent. This cuts the specific duty in half from the MVR 8 per stick introduced in late 2024 and lowers the ad valorem rate from 50 percent. The amendment also fully exempts nicotine gum, nicotine patches, and other products manufactured to aid smoking cessation from import duties. Officials estimate the change will bring the retail price of a pack down from around MVR 250 to roughly MVR 125.
The reduction unwinds a central plank of a tobacco-control drive that had drawn international attention. In 2024, the government doubled the specific cigarette duty from MVR 3 to MVR 8, banned the import and use of vapes, and later advanced a generational sales ban prohibiting anyone born on or after 1 January 2007 from buying tobacco. The measures earned Muizzu recognition abroad, including a special award from the World Health Organization on World No Tobacco Day 2025 and a place on TIME magazine’s 2025 list of the most influential people in health.
A Policy Reversal With Competing Explanations
The government has framed the duty cut not as a retreat but as a recalibration. At his weekly press conference, Muizzu said the change was part of a continuing process rather than a reversal of direction, and that the decision followed extensive cabinet deliberations. The cut is being paired with a cessation programme that includes financial and technical support and incentives for non-governmental organisations, a new national-awards category recognising work on quitting, and the removal of all import duty on cessation aids.
Officials have offered more than one rationale for the reduction. Home Minister Ali Ihusan first raised the prospect of a lower tariff at a World No Tobacco Day event, saying the duty would be brought into line with a rate the WHO had recommended for the Maldives. Ruling-party MP Ibrahim Shujau, defending the bill on the Majlis floor, argued that the 2024 increase had done its intended job of preventing former vape users from switching to cigarettes once vaping was banned, and said the government was now acting on academic research that recommended the change.
Critics have questioned both the process and the evidence. The bill cleared the committee stage and final vote in under two weeks, without stakeholder consultations. Opposition Maldivian Democratic Party MP Meekail Naseem said the 2024 policy had caused lasting social and economic harm, and criticised the practice of settling national health measures quickly and without broad input. According to figures cited in the bill’s annex, cigarette imports fell 77.5 percent in 2025 compared with 2024. Neither the WHO recommendation cited by the home minister, nor the academic research referenced by Shujau, nor the cabinet studies mentioned by the president, had been made public at the time of ratification.
What Happened After the 2024 Increase
Reporting from the period after the 2024 hike documented visible market effects. With a pack rising to as much as MVR 250, more than double the previous price, some smokers switched to cheaper smuggled brands or to rolling tobacco, and long queues formed outside the limited number of shops selling loose tobacco pouches. Retailers reported stock shortages in the weeks immediately following the change.
These shifts sit at the centre of the current debate. Supporters of the reduction argue that a very high price pushed habitual smokers toward untaxed and unregulated alternatives, including hand-rolled products prepared outside any hygiene or quality oversight, and that a more moderate duty keeps consumption within the regulated, taxed market where it can be monitored. Whether the 2024 duty measurably enlarged the illicit market in the Maldives, and by how much, has not been established through published data, and the amendment is too recent for its own effects to be assessed.
What the Research Says About Taxes and Illicit Trade
The premise that high tobacco taxes are the main driver of black markets is not well supported by the independent research literature, which is worth setting out given how often the claim appears in policy debates.
A 2019 World Bank review of country experiences concluded that raising tobacco taxes is not the primary cause of illicit trade. It found that illicit cigarette markets tend to be relatively larger in countries with low taxes and prices, and smaller in countries with higher taxes and prices, with non-price factors such as governance, the strength of the regulatory framework, and the presence of informal distribution networks mattering far more. The WHO’s regional guidance reaches a similar conclusion, noting that smuggling is generally higher in lower-price countries than in higher-price ones.
Independent studies point the same way. A household survey in Georgia tracking smokers before and after a 2018 tobacco-control law and a 2019 excise increase found no country-wide rise in illicit cigarette consumption, though it did record a shift toward roll-your-own tobacco, whose tax had been left unchanged. That finding underscores a practical lesson relevant to the Maldives: when one tobacco product is taxed heavily while a close substitute is not, consumers move toward the cheaper option, which is why analysts emphasise equalising duties across product categories to protect the public-health gains.
Researchers also caution that industry-funded estimates of illicit trade tend to be inflated, and that reviews of such studies have found a persistent lack of transparency in their methods. At the same time, the evidence does not suggest that price is the only lever. Analyses from the United States and elsewhere stress that raising prices works best when paired with enforcement against smuggling and counterfeiting, so that the health benefits of higher prices are not eroded at the margins.
A Familiar Tension in Tobacco Policy
The Maldives episode illustrates a tension common to tobacco control worldwide. Higher prices are among the most consistently effective tools for reducing consumption, and international frameworks treat taxation as a core measure. Yet price increases work best as part of a broader package that includes enforcement, consistent treatment of substitute products, and accessible support for people trying to quit. The government’s decision to remove all duty on cessation aids and to fund quitting programmes aligns with that broader approach, whatever view one takes of the duty reduction itself.
For now, the practical questions remain open. Whether a MVR 4 duty strikes a more sustainable balance than MVR 8, whether it draws smokers back from smuggled and hand-rolled products into the regulated market, and whether the accompanying cessation measures gain traction, will only become clear with data the government has said it will act on but has not yet released.
