Illicit cigarettes account for 55% of market, study finds
Published on: Wednesday, August 02, 2023
By: FMT
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The Confederation of Malaysian Tobacco Manufacturers says the government is losing billions in taxes because of the illicit cigarette trade.
PETALING JAYA: The prevalence of illicit cigarettes in Malaysia remains high at 55.3%, despite a 1.3% decline from 2022, says the Confederation of Malaysian Tobacco Manufacturers (CMTM).
Citing its Illicit Cigarettes Study 2023 report, CMTM said the 1.3% decline reflected positive progress, but more needed to be done as Malaysia remains among the leading markets of illicit cigarettes worldwide.
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It said the “porous” east coast border of Peninsular Malaysia was the root cause of the problem, adding that this has led to billions in taxes lost by Putrajaya.
“Consumers are mainly driven by illicit cigarettes that are sold for between RM4 and RM8 per packet, compared to the lowest category of legal cigarettes sold at RM12, due to almost RM9 in taxes per packet,” it said in a statement today.
It said there are more than 20 brands of smuggled cigarettes which bear fake tax stamps, and this will only increase if action is not taken against rogue importers.
CMTM supported the customs department’s offer to reward members of the public who blow the whistle on evasion of customs duties and taxes with 10% of the value of goods seized by the department.
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It called for this to be extended to other enforcement agencies such as the police, the Malaysian Maritime Enforcement Agency, and the health ministry.
“CMTM also recommends that the parliamentary committee tasked with reviewing the Control of Smoking Product for Public Health Bill 2023 undertake a comprehensive assessment and consultation for the bill.
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“This is to ensure that policies are made based on substantiated science-based evidence, preventing any unintentional proliferation of illicit cigarettes in the country further and reversing the positive strides made,” it said.
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