Cigarettes In Malaysia Too Affordable, Says US Tobacco Control Expert

A Johns Hopkins University tobacco control expert urges Malaysia to raise cigarette taxes that have not risen since 2015. Malaysia’s score in the Tobacconomics Cigarette Tax Scorecard dropped from 2020 to 2022, lagging behind top-performing countries.

KUALA LUMPUR, May 31 — A tobacco control expert from Johns Hopkins University has called for a steep cigarette tax increase in Malaysia, after excise duties on smoked tobacco have remained stagnant for nine years now.

Jeffrey Drope, director of Tobacconomics and research professor at the Johns Hopkins Bloomberg School of Public Health in the United States, described the increasing affordability of cigarettes in Malaysia as “really worrisome”.

“They (Malaysian government) have not raised taxes in quite some time. And as a result, cigarettes are actually becoming more affordable,” Drope said at the “State of Tobacco Control” virtual media roundtable organised by global health organisation Vital Strategies last May 21.

“The government needs to raise taxes on all tobacco products, especially cigarettes, and they need to do so at a quite a high rate in order to maximise the public health and the fiscal effects.”

The last duty increase in Malaysia was in 2015, up 42.8 per cent from 28 sen per stick in 2014 to 40 sen per stick in 2015.

For comparison, the cheapest pack of 20 cigarettes in Australia costs $18.88, while in New Zealand it is $19.33, according to the World Health Organization (WHO), based on international dollars after prices are adjusted for purchasing power.

Drope said the ideal tax rate is the rate at which taxes can be raised as high as possible without driving down revenues. “That’s really what we’re looking for in most countries and Malaysia.” 

He said raising taxes on tobacco products is arguably the most effective and straightforward solution to reduce consumption.

“When we raise excise taxes on tobacco products, it drives up the price and when the price goes up, consumers react in several ways: young people don’t start to use tobacco products, and people who already smoke or use tobacco stop or cut down. 

“This really has an enormous effect on consumption, and it really drives down the amount of tobacco use in the world,” Drope said.

Under Budget 2024 tabled in Parliament, Prime Minister Anwar Ibrahim’s government introduced 5 per cent excise duty on chewing tobacco, but did not raise cigarette taxes.

The 2023 Global Adult Tobacco Survey (GATS) on Malaysia, released by the Ministry of Health (MOH) on May 16, revealed that smoking cessation and health care behaviour among adults who currently smoke and those who attempted to quit in the last 12 months have remained stagnant.

About 41 per cent of adult smokers in Malaysia have no plans to quit, while only 9 per cent plan to quit within the next month. Approximately 13 per cent are considering quitting within the next 12 months, and another 37 per cent intend to stop someday.

The survey also found that 4.8 million adults in Malaysia, or 19 per cent of the population, smoke. Out of this total, 3.7 million people, or 14.6 per cent, smoke every day.

Malaysia Drops Points in Cigarette Tax Scorecard 

New data from Tobacconomics at Johns Hopkins University, released last May 21, reveals setbacks in tobacco control in the form of tobacco prices. Less than a quarter of countries have raised their tobacco taxes sufficiently to outpace inflation and growth. 

As a result, tobacco may become more affordable in several countries.

The Tobacconomics Cigarette Tax Scorecard, which tracks taxes in over 170 countries, shows that 76 countries, including Malaysia, saw their scores decline from 2020 to 2022, while only 31 countries improved.

Although global smoking prevalence has declined from 22.7 per cent in 2007 to 17 per cent in 2021, the total number of smokers remains near one billion, and youth smoking is climbing in 63 countries.

“We actually saw a decline in performance across all regions of the world and across pretty much all countries so we’re very worried. What we see is this really is an opportunity lost. This is an intervention that can drive down tobacco use and drive up revenues from tobacco taxes that can be put towards health and education.

“We really strongly encourage governments to reexamine why they’re not doing what they should be doing,” Drope said. 

Malaysia scored 2.5 out of 5 on the cigarette tax scorecard in 2022, down from 2.75 in 2020. While this is better than the regional and global averages, it lags behind top-performing countries, whose average score is 4.13.

The cigarette tax scorecard assesses four components of tax systems – price, change in affordability, tax share, and structure – on a scale of 0 to 5, where a higher score is preferred.

Malaysia scores poorly in affordability change (0) and tax share (2), and in the mid-range in cigarette price (4) and tax structure (4). It would greatly benefit from reducing the cigarette affordability, increasing the tax share of price, higher cigarette prices, and improving the tax structure.

According to the Tobacco Atlas factsheet on Malaysia, the economic cost of smoking and tobacco use in Malaysia each year is RM15.85 billion, with 29,457 deaths attributed to smoking annually.

“Tobacco use continues to be an epidemic in Malaysia. Government complacency in the face of the tobacco epidemic protects the tobacco industry in Malaysia as the death toll grows each year. 

“Proponents of healthier societies must push for the implementation of evidence-based best practices in tobacco control to create change and reduce the negative effects of tobacco use,” the report concludes.

Tobacco Atlas, an online resource on the tobacco epidemic, is a partnership between Vital Strategies and Tobacconomics at Johns Hopkins University.

Keep Tobacco Industry Interference Out of Policymaking

Vital Strategies tobacco control senior vice president Gan Quan said that tax policy is the most effective measure, and this is where the most interference from the tobacco industry occurs.

“It’s really imperative for countries to either pass policies to insulate the government from interference from the tobacco industry, or really keep the tobacco industry out of the table of the discussions. 

“So I think this is really key in ensuring that countries both pass adequate tax increases,” Gan Quan said.

Drope added that governments need the political will to raise taxes on cigarettes.

“The tobacco industry is constantly trying to undermine these efforts, and I believe it is because they know that this is an existential threat. It hurts their bottom line in a very big way. But governments really have the most to gain here because they can have a healthy society and they can reap the extra revenues.”

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