Malaysia continues to suffer major revenue losses from the illicit cigarette trade, with an estimated RM5 billion ($1.2 billion) in tax revenue lost each year, according to the latest NielsenIQ Illicit Cigarettes Study released in March.
After peaking at 63.8% in 2020, illicit cigarette consumption continued its slow decline down to 54.6%, according to the report, with 10 dominant contraband brands accounting for 75% of cigarettes smuggled. The study also raised alarm over rampant tax stamp fraud, noting that 31% of illegal cigarette packs bore counterfeit stamps.
“Organized smuggling syndicates are growing increasingly sophisticated, posing a serious challenge to enforcement and public health policy,” the report stated. Hotspot states such as Johor, Selangor, and Sabah were identified as major entry and distribution points for illicit tobacco products.