Minister of Economic Development and Trade Mohamed Saeed stated that there is no connection between the reduction in import duties and the implementation of the Maldives-China Free Trade Agreement.
He mentioned that since the FTA was put into effect last month, there has only been a one percent decrease in import duties.
During his remarks at last night’s ‘Ahaa’ Forum, Saeed explained that when goods worth MVR 1 billion are imported from China, businesses can still see considerable profits even with a minor reduction in duties.
“With the FTA, these figures have been reduced to zero percent. This means that if a guest house is being constructed and materials are sourced from China, they will be duty-free. This is a significant advantage,” he noted.
According to the Economic Ministry, while over MVR 1 billion worth of goods have been imported since January 1, only MVR 34 million of that was under the FTA agreement.
The duty concession for these goods amounted to MVR 2.2 million, which is 1.6 percent of the total import revenues.
Over the last month, state revenue has fallen by 19 percent, with 64 percent of that loss coming from import duties alone. Last year, MVR 384 billion was collected in import duties, while this year’s figures are at MVR 138 million, resulting in a loss of MVR 247 million.
Revenues for this year so far total MVR 3.7 billion, which is MVR 874 million less than last year. While state revenue has decreased, government expenditure continues to rise.
