Economic Minister Mohamed Saeed said on Saturday that the decline in import duty revenue this year is not linked to the Free Trade Agreement (FTA) with China, dismissing concerns that tariff exemptions under the deal had significantly impacted duty collections.
Speaking at the Ahaa Forum, Saeed said that while the FTA, which took effect in January, exempts many Chinese imports from duties, only a small portion of imports have benefited from these exemptions.
“So far this year, goods worth MVR 1 billion have been imported with a CIF value of MVR 34 million. Of that, only MVR 2.3 million was waived under the FTA,” he said. “That’s just 1% of total imports. This fall has nothing to do with the FTA.”
According to Finance Ministry data, import duty revenue from January to 6 February was MVR 246 million lower than the same period last year. Total government revenue also fell by MVR 874 million.
The government’s key policy measure to boost revenue in this year’s budget is an import duty revision. Authorities expect higher duties on cigarettes and bidding processes to generate an additional MVR 1 billion.
Saeed said efforts were underway to identify the reasons behind the revenue shortfall.
He added that the Maldives, an import-dependent country with low productivity, stands to benefit from the FTA’s duty exemptions. Many goods can now be imported from China without duties, lowering costs for various sectors, he said. He cited the guesthouse industry as an example, noting that the cost of setting up such facilities had decreased.