The Malaysian government could potentially lose as much as MYR6 billion ($1.4 billion) in taxes from cigarettes and vapor products due to poor enforcement against smugglers, according to Japan Tobacco International Berhad (JTI Malaysia).
The JTI Malaysia managing director, Cormac O’Rourke, said that currently one in seven Malaysian smokers was using illegal cigarettes and vapor products, and he added that the numbers would rise exponentially if left unchecked.
O’Rourke said unlicensed vape shops and the trade in illegal cigarettes were growing due to corruption and lack of enforcement of laws regulating the use of nicotine, such as the Poison Act 1952.
“Why is the government not acting? In the cigarette industry alone, they are losing MYR5 billion annually and yet we haven’t seen any sort of proper enforcement action taken,” O’Rourke said.
O’Rourke then suggested a three-pronged approach that included an independent task force on the matter, a moratorium on tobacco duty increases for three years and a ban on cigarette transshipments in Malaysia.