Two Years of Tobacco Policy: The Market Has Moved. Has Smoking?

Few consumer prices in the Maldives have been as politically engineered, or as economically revealing, as the price of a cigarette.

In November 2024, the Government set cigarette import duty at MVR 8 per stick plus 50% of the import value. Recorded imports through authorised channels subsequently collapsed. In July 2026, the Government changed course, reducing the duty to MVR 4 per stick plus 30%. By August, cigarette prices had fallen by almost a third in a single month and recorded tobacco imports had reached their highest monthly value since October 2024.

Tax policy had moved the market with remarkable speed. Whether it moved smokers in the direction intended is much less clear.

Two Years of Policy Whiplash

The changes introduced since November 2024 amounted to considerably more than a tax adjustment.

The initial duty amendment imposed the MVR 8 specific duty and 50% percentage charge on cigarettes, bidis and heated-tobacco consumables. Most other tobacco products attracted a 200% duty. A separate amendment to the Tobacco Control Act prohibited the import, sale, distribution and use of electronic cigarettes and vaping products, while raising the minimum age for tobacco sales to 21.

A generational tobacco ban followed. Since 1 November 2025, people born on or after 1 January 2007 have been prohibited from purchasing, using or being sold tobacco products. Retailers must verify customers’ ages. The policy is principally intended to prevent future initiation, which means its most important effects will emerge over years rather than months.

The impact of the duty increase was more immediate. According to the Maldives Monetary Authority’s tobacco-import series, the recorded import value of tobacco and tobacco accessories fell from USD 23.14 million in 2024 to USD 14.19 million in 2025, a decline of 38.7%.

That comparison should be treated cautiously. October 2024 recorded an unusually large import value of USD 6.09 million immediately before the higher duty took effect, suggesting that some purchases may have been brought forward.

The contraction was nevertheless unmistakable in the cigarette figures. Customs data obtained through a right-to-information request show that recorded imports fell from 338.1 million sticks in 2024 to 76.2 million in 2025, a decline of 77.5%.

That does not mean cigarette consumption fell by the same amount. Import data exclude existing stocks, products carried by travellers and cigarettes sold outside authorised channels. The figures show that the authorised supply chain was severely compressed, not that three-quarters of smokers had quit.

Authorised Imports Begin to Return

The July 2026 amendment halved the specific duty to MVR 4 and reduced the percentage charge to 30%. It also exempted nicotine gum, patches and other products manufactured specifically for smoking cessation from import duty.

The latest MMA data, which run to August, show a rapid response. Tobacco and tobacco-accessory imports reached USD 4.54 million that month, up 242.9% from July and 256.8% from August 2025. During the first eight months of 2026, imports totalled approximately USD 13.2 million, based on MBR calculations from the monthly series. That was about 61% higher than during the corresponding period of 2025 and nearly equal to the USD 14.19 million imported during the whole of last year.

Retail prices followed. The Maldives Bureau of Statistics’ August consumer-price data recorded a 31.64% monthly decline in cigarette prices. The Bureau attributed the fall to the July duty changes.

This is convincing evidence that more recorded tobacco trade is returning through authorised channels. It is not evidence that government revenue has recovered.

The 2026 Budget said total import-duty receipts in 2025 were expected to fall MVR 1.6 billion short of the original projection, mainly because cigarette-duty collections had declined. Cigarettes’ share of all import-duty revenue fell from 33% to 16%. Yet the explanatory notes accompanying the July reduction estimated that the lower rates would leave 2026 revenue USD 13.59 million below the original forecast.

Actual cigarette-specific collections following the amendment have not been published in sufficient detail to establish whether higher import volumes are compensating for the lower duty collected on each stick. The fiscal conclusion must therefore remain provisional. The rise in recorded import value shows more trade returning to authorised channels, but it does not establish that cigarette-duty revenue has recovered.

Nor did smuggling disappear with the lower rate. In September, Customs intercepted 8.53 million cigarettes concealed in a shipment declared as general cargo at Malé Commercial Harbour. One seizure cannot measure the illegal market. It might reflect increased smuggling, better enforcement or simply one unusually large consignment. It does, however, show that illicit supply remains a problem.

Global evidence suggests that lowering taxes alone is an unreliable solution. A World Bank review found that enforcement, tax administration, governance and informal distribution networks are generally more important determinants of illicit trade than tobacco tax rates.

For now, the evidence supports one conclusion: recorded imports through authorised channels are recovering. The revenue outcome remains unresolved. Determining whether the revised rate can provide sustainable receipts while preserving a meaningful deterrent to smoking will require detailed post-amendment duty data and a longer observation period.

What the Import Figures Cannot Show

A successful tobacco policy should ultimately be judged by how many people smoke, how much they smoke and how many are able to stop.

On these measures, the Maldives has a serious information gap. The latest publicly available nationally representative adult measurement remains the 2020-21 STEPS survey. It found that 23.1% of Maldivians aged 15 to 69 were current smokers, including 35.6% of men and 7.6% of women. Among current smokers, 87.1% smoked daily. Four in ten had attempted to stop during the preceding year.

Those figures predate the higher duty, vape ban, generational tobacco ban and subsequent duty reduction. Without a comparable survey following the reforms, the Government cannot yet demonstrate that adult smoking prevalence has fallen.

A small, self-selected survey conducted for MBR’s earlier article provided an illustrative, rather than nationally representative, indication. Some 82% of respondents noticed prices for cigarettes sold through authorised channels falling after July, but the same proportion continued using their previous category of tobacco product. The purchasing channel may have changed more than the consumer’s underlying behaviour.

The generational tobacco ban may eventually alter this picture by preventing young people from beginning to smoke. But it cannot, by itself, address dependence among adults who already smoke.

Helping Smokers Stop

Cessation is therefore the bridge between market regulation and better health.

WHO reported in 2025 that free cessation support had been established at health facilities nationwide. HPA later reported that 2,003 people sought assistance during 2025 and that 375 stopped smoking. Nicotine gum and patches were provided through Aasandha, while 494 healthcare workers received cessation training.

These are encouraging outputs, but they do not yet constitute a national quit rate. Future reporting should distinguish between people who enrol, complete treatment and remain tobacco-free after six or twelve months. The July duty exemption will matter only if cessation products remain available and smokers know how to obtain them.

The more contentious question concerns adults who continue to smoke.

The US Food and Drug Administration says combustible cigarettes are the most harmful tobacco products and that non-combustible products generally carry lower risks. It also stresses that no tobacco product is safe, that smokers must switch completely to obtain the potential benefit, and that modified-risk findings apply to specific authorised products rather than entire categories.

A 2026 Cochrane review found high-certainty evidence that regulated nicotine e-cigarettes produced higher quit rates than conventional nicotine-replacement therapy. However, longer studies are still needed to evaluate safety, and the evidence concerns regulated products used in cessation trials rather than illicit devices.

WHO takes a more precautionary position. Its 2025 guidance recommends enforcing prohibitions where they exist and imposing strict product, marketing and youth-access controls where such products are permitted.

Taken together, these positions do not provide a simple regulatory answer for the Maldives. They show that differences in risk exist, but also that findings cannot be generalised across product categories. The existing vape ban remains in force, and any discussion of harm reduction should distinguish evidence about relative risk from the separate policy question of which products the country permits.

Measuring the Next Two Years

The Maldives now has taxation, sales restrictions, a vape ban, a generational tobacco ban, cessation services and a five-year national anti-tobacco campaign. What it still lacks is a public measurement system capable of showing how these policies interact.

A quarterly dashboard should report cigarette-specific imports, duty collections, retail prices, seizures and cessation outcomes. Regular population surveys should measure smoking prevalence, daily consumption, quit attempts, sustained abstinence and youth initiation. Illicit-market estimates should be developed independently rather than inferred from authorised imports or occasional seizures.

The past two years show that the Government can reshape the tobacco market quickly. The November 2024 increase compressed authorised supply and raised prices. The July 2026 reduction brought more recorded trade back through authorised channels and made cigarettes cheaper. But the balance between revenue, enforcement and public health has not yet been demonstrated.

Recorded imports through authorised channels are recovering. Whether fewer Maldivians are smoking remains the question that matters.