Malaysia: Illicit Tobacco Share Down Slightly

The share of Malaysia’s illicit cigarette market declined slightly this year, reports the New Straits Times.

According to a recent survey, Illegal products accounted for 55.3 percent of the domestic cigarette market in May, down 1.3 percent from a year ago.

The Confederation of Malaysian Tobacco Manufacturers (CMTM) attributes the drop to new anti-illicit measures, including the strict control on the shipment of tobacco products and increased enforcement efforts.

In Kelantan, the illicit incidence had declined to 50.2 percent compared to 70.6 percent in 2020 as a result of heightened enforcement actions in the state.

Despite the progress, the prevalence of illicit cigarettes remains extremely high by international standards. While legal cigarettes retail for between MYR9 ($1.98) and MYR12, the same products can be purchased for between MYR4 and MYR8 on the black market.

The government misses out on an estimated MYR5 billion in annual revenues due to tax-avoiding cigarettes.

The survey report also highlighted the notable increasing presence of cigarette packs with fake tax stamps in the market. Based on the study, the incidence of cigarette packs with fake tax stamps has increased to 8.5 percent from 4.9 percent in 2018.

Concerned about the persistence of illicit trade, the CMTM urged the Parliamentary Special Select Committee to carefully consider the impact of the Control of Smoking Products for Public Health Bill 2023 that is currently under consideration in Malaysia.

Among other measures, the proposed legislation would prevent those born in or after 2007 from buying tobacco or vapes. Policies should be based on substantiated science-based evidence and be designed to prevent any unintentional proliferation of illicit cigarettes, the CMTM said