From: Malaysia Chronicle
The Confederation of Malaysian Tobacco Manufacturers (CMTM) strongly feels the call to increase cigarette tax by fourfold is an extreme tobacco excise proposal that plays into the hands of criminal syndicates.
Recently, the Malaysian Council for Tobacco Control (MCTC) called on the government to increase up to fourfold the tax and prices of cigarettes in order to deter smokers and reduce non-communicable diseases.
CMTM Chief Executive Shahrul Azamin Abdullah said the call which ignored the dire consequences of such a proposal was exactly what criminal syndicates are waiting for to smuggle even more illegal cigarettes into the country.
“Therefore, we are of the opinion that it is important to give a broader context and perspective to MCTC’s recent call,” he said in a statement today.
The issue of illegal cigarettes remains real and very serious, with 34.5 per cent of the market, or around eight billion cigarettes annually, consisted of cheap illegal imports, based on the CMTM Illegal Cigarettes Study at the end of 2012.
According to the government, the issue was very serious and cost almost RM2 billion per year in lost excise taxes.
He stressed the reality was that there were over 130 types of illegal cigarette brands being sold for as little as RM3.50.
“This is half the mandated minimum price of RM7 in countless shops around the country, easily accessible and very affordable to the very people that price and tax hike advocates are focusing on — the low-income earners and the young.
“The call to increase cigarette tax by fourfold will increase the price of a legal pack of cigarettes to about RM25 from the current RM10.50 while illegal cigarette prices have not changed for the past 10 years.
“This would only result in an explosion in the levels of illegal cigarettes and would be greatly appreciated by the illegal operators who do not care how, where, or to whom, their unregulated non-tax paid products are sold,” he stressed.
Cigarette prices in Malaysia are also the third highest in Asean, after Singapore and Brunei.
He added many countries around the world has also recognised the link between illegal cigarettes and sudden high excise tax increases, and had chosen not to increase cigarettes taxes as a result.
“Singapore for example has not increased excise on cigarettes for eight years in a row due to the prevalence of illegal cigarettes,” he said.
