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KUALA LUMPUR: The Malaysian chapter of Retail and Trade Brands Advocacy (RTBA) has called on the government to reduce tobacco taxes to curb the black market for illicit cigarettes, as recently suggested by Pontian MP Ahmad Maslan in the Dewan Rakyat.
Managing Director Fazli Nordin said the central factor driving the illegal cigarette trade was the wide price gap between legal and illegal products, resulting in the current critical level of illicit cigarettes in the country.
“There are international and local studies that support this claim,” he said today in a statement.
The RTBA is an NGO that aims to protect supply chains and brands from criminal conduct.
The RTBA report “Illicit Tobacco in the Asia-Pacific Region: Causes and Solutions”, released in April 2020, showed that illegal cigarette sales in Malaysia increased to 65% in 2020 from 37% in 2015, after a substantial increase in excise duties. on legal products in 2015.
“Clearly, the numbers speak for themselves,” Fazli said.
Ahmad had recently floated the idea of halving tobacco taxes to sell cigarettes at RM 8 per pack in a two-year pilot study to curb the black market and that Malaysia was losing RM 5 billion annually in tobacco tax revenue. He said that 64% of cigarettes sold in the country were illegal sticks, while only 36% were taxed legal cigarettes.
He claimed that cigarettes often disappeared in Malaysia during the transshipment process and were re-exported to another country. As such, Malaysia lost around RM5 billion in tobacco tax revenue each year.
Fazli said Ahmad was right in identifying excise reforms as a solution that can better complement the enhanced enforcement initiatives implemented in the 2021 budget to comprehensively address the black market for tobacco.
He congratulated the government for making the bold decision to address the black market for tobacco in the 2021 budget.
Initiatives, such as the strengthening of the multi-agency working group with the participation of the Malaysian Anti-Corruption Commission and the National Center for Financial Crimes, as well as the announcement of restrictions on cigarette transshipment activities, will help address the supply chain route to the black market for tobacco. up to a point, he added.
