MEASURES put in place to counter the illegal cigarettes trade in Malaysia are starting to bear fruit as the recent Nielsen’s Illicit Cigarettes Study (ICS) reported that the country’s incidence for illicit cigarettes fell by 6.5% to 57.3% in October 2021 from 63.8% in 2020.
The report also indicated that Sabah and Sarawak – the top two states with the highest number of illegal cigarettes incidence in 2020 – saw a minor year-on-year improvement to 81.2% (86.6%) and 76.9% (82.2%) respectively.
The only state that recorded a slight increase was Johor which illegal cigarettes incidences rose to 46.5% in October 2021 from 46%.
While the Government’s initiative to address the illegal cigarettes problem is starting to work, much work is still needed to stem this endemic problem that cost the Government RM5 bil annually in uncollected taxes, according to Retail and Trade Brands Advocacy Malaysia Chapter (RTBA Malaysia) managing director Datuk Fazli Nordin.
“The Government must remain focused and committed to eradicating this problem so that it can collect much more revenue to rebuild our economy, ie. by paying for damages caused by the recent floods,” he told FocusM.
“RTBA Malaysia which is part of a multinational advocacy aimed at safeguarding businesses from crime strongly believes that the multi-agency task force (MATF) must play a more prominent and transparent role in combating the illegal cigarettes trade.”
Fazli said RTBA Malaysia wishes to see the MATF outline a cohesive and comprehensive plan to bring illegal cigarettes incidences in Malaysia significantly below the global averages.
“We would also like to see the MATF submit tangible policy recommendations to the Government that can address law enforcement process and funding shortfalls, thus closing the price gap between legal and illegal cigarettes to disincentivise crime syndicates,” he pointed out.
“Similarly, we hope the authorities would maintain a long-term excise tax moratorium to maximise the progress achieved from the Budget 2021 anti-illegal cigarettes initiatives.”
Very broadly, the Government has implemented a series of initiatives to counter the illegal cigarettes trade in 2021.
These include freezing the issuance of new import licences for cigarettes, tightening the renewal of import licences for cigarettes, limiting the transhipment of cigarettes to dedicated ports, and imposition of tax on the import of cigarettes with drawback facilities re-export, disallowing transhipment of cigarettes and re-export of cigarettes by small boats.
Moreover, Budget 2021 also saw the strengthening of the MATF with the inclusion of the Malaysia Anti-Corruption Commission (MACC) and the National Anti-Financial Crime Centre.
The MATF initially consisted of the Royal Malaysian Customs Department, the Royal Malaysian Police, the Health Ministry, and the Domestic Trade and Consumer Affairs Ministry. – Jan 6, 2022
