KUALA LUMPUR, Dec 16 — Ahmad Maslan suggested today halving tobacco taxes to sell cigarettes at RM8 per pack in a two-year pilot study to curb the black market.
The Pontian MP and former deputy finance minister pointed out during the Dewan Rakyat sitting today that Malaysia lost RM5 billion in tobacco tax revenue annually, as 64 per cent of cigarettes sold in the country were illegal sticks, while only 36 per cent were taxed, legal cigarettes.
“The taxed cigarettes are priced from RM17.40 to RM12. The illegal (cigarettes from) RM8 to RM2 and there are some packs with five sticks which cost only RM2,” Ahmad said today while debating the Customs (Amendment) Act 2020.
“This is very dangerous because these smuggled cigarettes can be bought by school children.
“According to a study, Malaysia has the largest black market for cigarettes and this is not supposed to happen because smuggled cigarettes have higher nicotine and tar levels and do not have a health warning or follow manufacturing standards,” the Umno lawmaker added.
Nicotine is highly addictive and can increase blood pressure, heart rate, and cause narrowing of the arteries besides, contributing to the hardening of arterial walls. Tar formed a sticky layer inside the lungs which damages it and can cause cancer.
He pointed out that cigarettes go “missing” in Malaysia during the transhipment process before they get re-exported to other countries.
The Pontian MP said that the government can conduct a two-year pilot programme, whereby the price per cigarette pack for any particular brand can be sold at RM8, which is similar to the price of illegal packs.
“So, we don’t want to lose RM5 billion from smuggling. Cigarettes and RM5 billion is not a small amount and I’d like to mention again that a study found that Malaysia has the largest black market for cigarettes in the world.”
In a panel discussion hosted by New Straits Times on October 18, Senior Head of Tobacco Research at Euromonitor International, Shane MacGuill, said that illegal cigarettes in Malaysia comprise close to 65 per cent, or almost two-thirds of the entire market in 2019. It was also brought up during the discussion that affordability was an issue hence, people would rather choose cheaper options.