A WHO rate, unseen studies and a U-turn: Maldives makes cigarettes cheaper

Amendments to the Import-Export Act passed by parliament on Wednesday cut the specific duty on cigarettes, cigars and heated tobacco sticks from MVR 8 (US$ 0.52) to MVR 4. The ad valorem rate was lowered from 50 percent to 30 percent. The changes are expected to bring the price of a pack down from about MVR 250 to MVR 125.

President Dr Mohamed Muizzu ratified the bill on Thursday. 

"The change we are now making is not a step backwards. It is part of this process," Muizzu said at his weekly press conference on Monday. "We are going straight along the road we started on. In no way are we reversing course." 

The president said the decision was made after extensive cabinet deliberations. The cut would come with a programme to push smoking cessation: financial and technical support and incentives for NGOs, a new national-awards category recognising work on quitting, and the removal of all import duty on cessation aids.

He also offered a further justification: habitual smokers were turning to "things far more damaging to health, things that destroy the lungs far more." The government was "concerned that consumption of various other tobacco products might increase abnormally." The cut was partly intended to stop that shift, he said.

The U-turn leaves a government that banned vapes, outlawed smoking for everyone born after January 1, 2007 and vowed a tobacco-free society making cigarettes cheaper for everyone else.

It unwinds the regime that made Muizzu an international poster case for tobacco control. The WHO honoured him with a director-general's special award in its World No Tobacco Day 2025 honours. In February, TIME magazine named him among its 100 most influential people in health.

The rationale for the reversal has shifted with each telling.

Home Minister Ali Ihusan floated the tariff reduction at a press conference marking World No Tobacco Day on May 31. He claimed the duty would be brought down in line with a rate recommended for the Maldives by the World Health Organisation.

Ihusan and government spokesman Mohamed Hussain Shareef 'Mundhu' could not be reached for comment. 

“At the moment, we are not taking any media queries related to this particular issue and would appreciate if you could kindly direct the questions to Ministry of Health Family and Welfare, or Health Protection Agency media focal points,” the WHO told the Maldives Independent.

Ihusan's announcement came six days before a parliamentary by-election in Addu City, which the People's National Congress lost. The ruling PNC also lost the April 4 council elections and the constitutional referendum decisively.  

The bill was submitted to parliament in late June, about a year and a half after the tariff was raised from MVR 3.50 alongside the vaping ban. It cleared the committee stage and final vote in under two weeks without any stakeholder consultations.

Defending the bill on the Majlis floor last week, ruling party MP Ibrahim Shujau said the 2024 hike had been a hedge against vape users switching to cigarettes. He insisted that it had worked. "When we researched that concern…because of the firm measures the government took, once the vape ban [was in place, the community] did not migrate to tobacco," he contended. "Because that happened, with reference to academic research with an overall recommendation, we have had to bring this change today."

Neither the WHO recommendation invoked by Ihusan nor the academic research Shujau cited has been made public. The same is true for the cabinet consultations and technical studies to which Muizzu referred. No document has been produced under any of the three descriptions.

On Wednesday, a senior health professional told Sun anonymously that the WHO viewed the decision as a mistake in informal discussions but would not publicly criticise a sovereign government's decision; that the Tobacco Control Board, the statutory body charged by law with overseeing tobacco policy, was never consulted; and that the whole-house committee approved the bill without hearing a single technical expert.

The Majlis passed it with the consensus of 68 members, including some from the opposition MDP. The health professional quoted by Sun appealed directly to the president: "Our plea is for the president not to ratify this bill."

The defence offered by ruling party lawmakers appeared to contradict the president's own. If firm enforcement rather than price stopped vapers migrating to cigarettes, but if habitual smokers are shifting to more harmful products – as Muizzu suggested – it is unclear what the MVR 8 duty was achieving.

After the price hike in 2024, many smokers switched to cheaper illegally smuggled brands or the option of rolling tobacco. Long lines stretched outside the Root shop in Malé, one of two businesses that sell the tobacco pouches.

During last week's debate, MP Meekail Naseem from the Maldivian Democratic Party said the 2024 policy caused "irreparable damage" socially and economically. "How many families were torn apart because of this issue? How many people had mental illnesses?" he asked. 

The policy showed what happens when a national health measure is settled "over a single afternoon" in the course of one night's dinner-table debate, he said.

According to the bill's annex, cigarette imports fell 77.5 percent in 2025 compared with 2024. It went down a further 21.4 percent by May this year. The fall was attributed to "behavioural changes" among importers and smokers. Conceding that demand after a duty cut is difficult to estimate, the bill projected a 50 percent rise in imports over the second half of the year – up from 64,235,819 to 91,358,413 sticks – if the change takes effect on July 1. But duty receipts were estimated to come in MVR 21.4 million below the MVR 537.6 million (US$ 32 million) budgeted from cigarette duty for 2026.

"The number of smuggled cigarettes in the Maldives has now surpassed legally imported, duty-paid cigarettes," former deputy speaker Ahmed Nazim told the floor in November, presenting findings by the 241 committee. Cigarette duty receipts plummeted from more than MVR 100 million to MVR 5 million despite the higher rates.

Smuggled cigarettes and vaping devices are "widely available" and "sold openly through social media," Nazim observed. Black market vapes are now more expensive but "still cheaper than cigarettes," he added.

Contraband packs without the pictorial health warnings in Dhivehi required under the Tobacco Control Act sell openly across the country – in shops, cafés and street stalls from Thuraakunu to Gan – at MVR 80 to 120, less than the MVR 160 that specific duty alone adds to a legal pack. Seizures of smuggled shipments have become a regular fixture. 

Ali Hashim, former central bank governor, said the government should have expected the consequences of the tariff hike. He questioned whether any simulations had been made, citing economic theory and studies showing how price increases do not dampen inelastic demand. 

"Tobacco is a substantial portion of revenue. Some other countries they pump the whole thing into the health sector," he told the Maldives Independent, suggesting that the government should "set a target and take that money and plug it into the health system, ring-fencing it."

Questions sent to the health ministry this week – including whether the decision was linked to the by-election, what precisely the WHO recommended and how the revenue effect has been budgeted – had not been answered at the time of publication.