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Tax to be imposed on plastic bags starting June 2022

A plastic bag thrown into the sea.

The proposed state budget for the year 2022 has included imposing a tax on plastic bags.

This decision was taken in line with the Environment Ministry’s single-use plastic phase-out plan formulated last year.

The plan dictates to impose a tax on a variety of sing-use plastics – including plastic bags – as a market-based instrument.

As per the plan – a tax of MVR 2 will be levied from each plastic bag regardless of its size. The tax will be levied starting from next year’s June.

It is forecasted in the proposed budget that MVR 47.7 million will be secured by the government as revenue from the tax on plastic bags.

In addition to this – it is forecasted that MVR 727 million will be secured by the government from the new revenue measures proposed in the budget.

Whilst delivering the budget statement at the Parliament today – Finance Minister Ibrahim Ameer said that the government is projected to receive MVR 24.2 billion as total revenue next year which is inclusive of tax and grants.

“The new revenue measures proposed for next year are in line with the government’s policies and its electoral pledges,” he added.

The new revenue measures proposed in the state budget 2022:

  • Selling land reclaimed at government’s expenses to private parties
  • Introduction of real estate tourism
  • Leasing islands for the development of resorts

Out of these three things – selling land reclaimed at the government’s expenses to private parties and the introduction of real estate tourism were also included in this year’s budget. However, the implementation of both measures was postponed due to various difficulties.

Revenue projected to be generated from the new revenue measures:

  • Selling land reclaimed at government’s expenses to private parties – MVR 148 million
  • Introduction of real estate tourism – MVR 231 million
  • Leasing islands for the development of resorts – MVR 300 million

The government proposed a budget of MVR 36.9 billion in total for next year.

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