Enforcement efforts reduce illegal cigarettes trade
Posted on August 7, 2012, Tuesday
KUALA LUMPUR: Illegal cigarettes incidence in Malaysia trended downwards to 34.7 per cent for March-May 2012, compared with 37.3 per cent in the same period last year, driven by enforcement efforts, said Confederation of Malaysian Tobacco Manufacturers (CMTM).
In a statement yesterday, CMTM said, citing the findings of its Illicit Cigarettes Survey, that incident was even higher in 2010, which reached 39.7 per cent.
“The downtrend is the positive impact of the significant enforcement efforts by the Royal Malaysian Customs, Malaysian Maritime Enforcement Agency, the Ministry of Domestic Trade, Co-operatives and Consumerism, Ministry of Health and the Royal Malaysia Police.
“We believe this promising start to 2012 also reflects the government’s decision of not increasing excise taxes on cigarettes during the last budget, which would have resulted in consumers switching to the illegal tobacco category.”
However, this tremendous progress has been undermined by the emergence of an alarming new trend of local brands, sold illegally below the mandated minimum cigarette price of RM7 and is believed to be manufactured offshore in Batam, Indonesia, it said.
CMTM chief executive officer Shahrul Azamin Abdullah said the illegal cigarette trade deprives the government of RM2 billion annually in lost tobacco excise revenue.
“Given the ongoing severity of illegal cigarettes incidence in Malaysia, we have appealed to the government to take a moderate tax approach to cigarette excise in the upcoming Budget 2013.”
He said a policy of moderate excise tax, combined with an enhanced enforcement efforts and the application of maximum penalties against those caught manufacturing, transporting and selling illegal cigarettes would be an effective long term strategy to fight illegal cigarettes incidence. — Bernama