Tobacco products imported from China to the Maldives would not be exempt from import duty, despite the provisions of the China-Maldives Free Trade Agreement (FTA), as confirmed by Mohamed Saeed, the Minister of Economic Development and Trade. This clarification was provided in response to a written inquiry by Mohamed Ibrahim, the Member of Parliament for North Galolhu.
Minister Saeed elaborated that while the China-Maldives FTA eliminates import duties on a broad range of products, tobacco items are specifically excluded from this exemption. He stressed that tobacco imports from China would be subject to the same import duty as those from other countries. The revenue generated from tobacco imports to the Maldives from China will depend on the volume of imports, he noted.
Concerns were raised by MP Ibrahim regarding potential revenue losses for the state stemming from the exemption of numerous products from import duties under the FTA with China. Minister Saeed addressed these apprehensions by explaining that the duty on imports from China would be determined by the prices of the imported goods, and the total revenue impact would only be assessed after transactions are finalised.
Addressing allegations of a decline in the Maldives' import duty revenue due to the FTA with China, Minister Saeed categorically stated that these matters are unrelated. He provided further insights, highlighting the differing perspectives between the Maldives and developed countries in the context of FTA drafting and implementation. He also underscored the benefits of the FTA for the general public, given the Maldives' reliance on imports.
The China-Maldives FTA, which took effect in January, has significant implications for the fisheries sector. Import duties on all fisheries sector products exported from the Maldives to China have been abolished. In return, specified goods imported from China to the Maldives will also benefit from duty exemptions.