ILLICIT cigarettes prevalence in Malaysia has dropped by 6.5 percentage points from an all-time high of 63.8% in 2020 to 57.3% in 2021.
According to the Illicit Cigarettes Study (ICS) in Malaysia 2021 conducted by international market research company, Nielsen, this is the first time since 2014 that illicit cigarettes prevalence has registered a decline.
But more needs to be done to address the issue because the Government continues to lose billions of ringgit every year from unpaid taxes on illicit cigarettes.
“This indicates that the measures announced by the Minister of Finance in Budget 2021 are starting to bear results,” a Confederation of Malaysians Tobacco Manufacturers (CMTM) spokesperson pointed out in a media statement.
“This is an encouraging development and CMTM urges the Government and all stakeholders to continue all efforts to curb the illicit cigarette trade.”
Despite the success in bringing down the country’s illicit cigarettes prevalence to a seven-year low, the 57.3% figure is still considered “very high”.
Malaysia remains the No.1 country for illicit cigarettes with smuggling syndicates gradually reacting to those Budget 2021 measures by employing new methods to bring illicit cigarettes into Malaysia.
In this regard, CMTM calls on the Government to further enhance its enforcement to address the continuous smuggling activities, especially at coastal areas and to ensure those Budget 2021 measures are maintained and enforced.
This includes a closer collaboration between the industry and Government to address tobacco smuggling activities through the Multi-Agency Task Force (MATF) initiative.
CMTM also calls on the Government to conduct a detailed regulatory and economic impact analysis and to engage all stakeholders across the entire value chain, including manufacturers, distributors and retailers prior to introducing proposals such as the Tobacco End Game 2040,.
This is given that such proposal may inadvertently increase illicit products in the market, thus eroding the hard-won gains in tackling the illicit cigarette trade in Malaysia. – March 10, 2022
