The Maldives Inland Revenue Authority (MIRA) has reported that 317 businesses have failed to pay the new plastic bag fee, owing more than MVR 1.54 million.

The fee, which took effect on 18 April 2023 under the Waste Management Act, is more than a fiscal measure; it is a key component in the nation’s environmental strategy to manage plastic waste more effectively.

The initiative, implemented by the previous administration of Ibrahim Mohamed Solih, requires commercial vendors to levy a charge of MVR 2 for each plastic bag provided to customers. The policy aims to deter single-use plastics, a significant contributor to pollution, by reducing their production and importation into the Maldives.

In its annual report for 2023, MIRA, the principal revenue collection agency for the state, acknowledged that the actual income from plastic bag fees fell short of initial projections. Since May 2023, when MIRA began tracking revenue from this source, it has collected MVR 8.65 million between May and November of that year. However, the failure of numerous businesses to remit the required fees has resulted in a 70 percent shortfall in expected revenue for the year, the report said.

Despite this, records show that MIRA has collected MVR 16 million from the environmental levy since its inception through the first quarter of 2024.The current waste management legislation stipulates that consumers purchasing in bulk—over 50 plastic bags at a time—must pay the MVR 2 fee per bag.

In response to concerns raised by the business community, the government has proposed a legislative amendment to the parliament. Submitted in October 2023, the bill seeks to exempt bulk purchases from the fee and streamline taxation for retailers and cafés by introducing a uniform tax rate. Additionally, the amendment proposes reducing the per-bag fee to MVR 0.50 and instituting an annual review process.

The plastic bag fee was introduced as part of the government’s efforts to address the issue of single-use plastic pollution, which poses a significant threat to the country’s vital tourism and fishing sectors. The World Bank reports that the Maldives produces an estimated 365,000 metric tonnes of solid waste a year, mainly from resort islands.