Tax to be Taken from Plastic Bag Imports From 2022 Onwards

A tax of MVR 2 per plastic bag that is imported to the Maldives will be taken starting from next year. Maldives Inland Revenue Authority (MIRA) expects to generate an income of MVR 48 million from the tax taken on plastic bags.

The taxation on plastic bags serves a two-fold purpose; it not only creates more ways to generate income for the government, but it also helps to reduce plastic bag usage in the Maldives. The Environment Ministry’s plan of phasing out single-use plastic involves taxation on certain items.

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The regulation for plastic bag taxation is not yet finalized, and it is unknown whether the tax will be taken from parties that import plastic bags or the shops that use them. According to the Ministry of Finance, several countries impose a tax of MVR 1 to MVR 4 on plastic items, and the plastic usage of these countries is lower by 60 to 90 percent.

The Finance Ministry has also stated that if the tax implementation is delayed by one quarter, the income received may fall to MVR 35 million. If it is delayed to the third quarter, the income may be only MVR 23 million. Likewise, if it is delayed to the fourth quarter the income will be only around MVR 10 million.

The government has now made guidelines and criteria for biodegradable bags, and the imported plastic bags must meet the criteria to get tax exemption. The government is now working hard to minimize and eventually halt the use of single-use plastic items in the country.

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