KUALA LUMPUR: The government lost a staggering RM6 billion in tax revenue this year due to the illegal import of cigarettes.
“The failure by authorities to act against illegal imports of cigarettes has handed the trade ‘lock, stock, and barrel’ to criminal gangs,” said JT International Bhd managing director Cormac O’Rourke.
He said 65% of all cigarettes consumed in the country were illegal, adding that contraband cigarettes cost RM3 to RM7 a pack but the cost to cigarette companies, including taxes and stamp duty, was RM9.
“The government has a set the minimum price of cigarettes at RM10 but those selling illicit cigarettes can ignore this,” O’Rourke said during a media briefing organised by the Confederation of Malaysian Tobacco Manufacturers.
“The government is planning a 50% increase to RM15, but this increase will not hurt the illegal trade. Only those selling legitimate cigarettes will be hurt, especially the retailers, who are already feeling the pinch from the widespread sale of illicit cigarettes.”
He described the policy proposal as “reckless”, as those in the illegal cigarette trade will not be bound by the price set by the government.
