‘Budget announcement the first step to tackling tobacco black market’

06 Nov 2020 / 19:06 H.

PETALING JAYA: British American Tobacco (Malaysia) Bhd (BAT Malaysia) has commended the Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz for announcing measures to the stop the tobacco black market in his Budget 2021 speech today.

BAT Malaysia sees the measures as the first step to disrupting the supply of illegal cigarettes in Malaysia.

The company also highlighted that the government’s move is both timely and necessary as Malaysia is currently the No. 1 in the world for illegal cigarettes, which take up 65% of the total market.

“We are thankful to the Finance Minister and the Malaysian government for acknowledging the severity of the tobacco black market and taking a bold step towards addressing this issue,” BAT Malaysia managing director Jonathan Reed said today.

“High taxes on legitimate cigarettes have created a huge demand for cheap, illegal cigarettes. The tobacco black market not only causes the loss of billions of ringgit in uncollected tax, it also funds crime, fuels corruption and drives the youth smoking rate.”

“Moving forward, measures to enhance enforcement must be accompanied by excise reforms to really make an impact on the tobacco black market. The price gap between legal and illegal products is currently far too wide, creating a situation that enforcement alone cannot address.”

Reed said BAT Malaysia believes Malaysian consumers want to do the right thing. “If given a viable opportunity to choose a legal alternative at a reasonable price, most would prefer not to put money in the hands of criminals,” he added.

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