Maldives Customs has said that duty amendments to the import-export laws of the country brought about recently is expected to result in the reduction of prices.
The Customs Tariffs and Statistics section deputy head Ali Zubair, speaking with Sun today said that the duties would be reduced by about MVR 178 million for businesses due to the amendments., which would in turn reduce prices for the public.
Previously, customs had been calculating the duty of goods through the CIF charge rates, while now it is charging through the FOB rate.
“Previously the CIF rates were used, this includes all the charges incurred to import the goods. By collecting duty from the FOB rate, this means that only the expenses incurred to transport the goods to the boat will be charged. In addition to the reduction of prices, businesses would also find it easier with this amendment” Said Zubair who added that businesses would no longer have to wait for freight documents and insurance.
He also added that issues of freight charges incurred due to price fluctuations from oil would be resolved. The amendment is to be implemented starting from August 1.
The amendment will see duties on public related goods reduced while increasing the specific duty goods that may cause damage to public health. Although the total income from duties by Customs would increase, it means that income from the public related goods would be reduced.
The amendment also means that previous charges for a revenue stamp fee would no longer be in place and will be replaced with a revenue fee. MVR 1 from every MVR 100 will be charged from a price set by Customs for the imported goods into the country.
Customs said that the change would bring an increase of MVR 500 million in income.
“We expect a revenue increment of MVR 500 million collectively.” Said Zubair.
Duties have been increased on products such as cigarettes and tobacco products, energy drinks, processed meats, drinks and light food with high sugar content. The changes to the law means that MVR 20 would increase per cigarette pack.
Customs said that around MVR 1 billion was received as income by the state from duty charges on cigarettes and tobacco products under the previous law. The current changes would increase that figure by a further MVR 500 million.
“Income increase is not only the purpose of this. Discouraging people from smoking is also a purpose.” Said Zubair.
In total, duties of around 1,600 goods were amended under the new laws, according to Customs. Out of these duty charges would be reduced for 75 percent of items. Goods that will see a reduction of duty include, fishfinders, binoculars, poles, nets, engines, engine parts, fiber boat building components, which will see a reduction of 91 percent in duties for the fishing industry. Other items that will see a reduction of duty include construction equipment, Inverter AC, water filters, sewing machines, environment-friendly LED bulbs, Geo bags.
Duties are ramped up for items such as Chewing gum, energy drinks, sausages, soft drinks, and sweets as well as confectionery items, vape liquids, and vapes.
Maldives Customs said that importers are to clarify information regarding the duty changes. Imported items before August will be levied the same charges as before, while the goods imported afterward will be charged under the new amendment.
Massive duty reductions are extended to goods imported through regional ports in Kulhudhuffushi and Addu City. However, pork and tobacco products are exempted from these reductions.