Illicit cigarettes lead market

Malaysia’s Royal Customs Department last year seized illicit cigarettes on which RM1 billion in taxes should have been paid, according to a story in The Malaysian Reserve.
The Department was said last year to have intensified its operations aimed at curbing the increase in illicit tobacco products in the country.
But it has a struggle on its hands. The high retail price of licit cigarettes in Malaysia makes the country a haven for smugglers and some retailers who are able to reap huge profits as smokers seek cheaper alternatives.
The government increased cigarette taxes by 110 percent during the past five years so that whereas licit brands sell for about RM17 per pack, illicit products sell for RM4-5 per pack.
An additional problem for the Department is that Malaysia’s long coastline makes monitoring the entry of illicit cigarettes difficult.
Illicit cigarettes were said last year to have taken about 57 percent of Malaysia’s 18-billion market.
The Malaysian Reserve said it was estimated that the government had lost billions in tax revenue due to the mushrooming of illicit cigarettes.