The Palau government has reinstated taxes on alcohol and tobacco to improve infrastructure following the threat of SARS.
The outbreak prompted Palau to stop flights to Taiwan for several weeks because of fears that the infrastructure was inadequate to deal with such a problem.
The President, Tommy Remengesau, says the tax was worth about 1.3 million US dollars and with the decline in tourism funds are needed.
After initial opposition, Congress approved the tax change which is effective immediately.
Import duty on cigarettes is 50 cents per pack and three cents per ounce of beer.