Illicit cigarettes are a known problem in Malaysia. The Malaysian government has been estimated to have lost a staggering RM5 billion yearly in collection of tax due to this. This issue must be seen in its proper perspective to truly solve it.
It is very clear that the direct cause of illicit cigarettes is due to increase of corruption and poor enforcement of laws related to illicit cigarettes.
Therefore, the solution is clear. Firstly, laws related to illicit cigarettes must be in place. Malaysia must immediately ratify the Protocol to Eliminate Illicit Trade in Tobacco Products under the World Health Organization, Framework Convention on Tobacco Control.
At the same time, a comprehensive approach must be used to increase coordination between relevant agencies in the enforcement of laws related to illicit cigarettes. Penalties should be made more effective by increasing fines, revoking licenses and having jail time for the dealers, distributors, users and other parties related in the smuggling of the illicit cigarettes.
Local and international experts have concluded that the smuggling of illicit cigarettes in large scales are closely related to high levels of corruption.
Therefore, the government must have efforts to combat corruption among enforcement officers as part of their strategy in curbing illicit cigarettes.
To support the above efforts, Malaysia should form a special task force that comprises of members from multiple agencies related to illicit cigarettes. We can emulate Australia’s Australian Border Force Tobacco Strike Team and Illicit Tobacco Task Force.
To get this task force running, it is worth investing between RM200-RM300 million a year with the return investment of RM4 billion to RM5 billion in the form of tax revenue. Other than that, this taskforce can assist the Ministry of Health Malaysia in the Malaysia Smoke Free 2045 campaign.
Other than loss of tax revenues, illicit cigarettes poses a threat to health and hinders the campaign to reduce smokers and disease due to smoking.
Blaming the sin tax and the high prices of cigarettes as the main cause of illicit cigarettes is wrong and misleading. It only has limited influence for cigarettes smuggling across borders called ‘bootlegging’.
Gradual increase of the tax on tobacco products has been proven as an effective way to reduce tobacco demand in the short term. However, excise tax for tobacco in Malaysia has not risen since 2015.
The government should further increase the tobacco excise tax and not be influenced by claims by the tobacco industry that it will increase illicit cigarettes. The demand of the tobacco industry for a ‘moratorium’ or a delay of the tobacco excise tax increase should not be entertained all together.
The community should also have the awareness of this problem and fight illicit cigarettes together with the government. We urge the Malaysian government to act now and fight illicit cigarettes to the ground.
Public Health Medicine Specialists, the Sunrise Project:
Zainal Ariffin Omar
Siti Nurbaya Shahrir
- This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.