KUALA LUMPUR:Malaysia can no longer afford revenue losses caused by a RM300 billion shadow economy, especially at present climate when the national economic outlook remains bleak, said Retail and Trade Brands Advocacy Malaysia Chapter (RTBA Malaysia).
In expressing concern, RTBA Malaysia would like to highlight a clear message for Finance Minister Tengku Zafrul Aziz for the upcoming Budget 2021 - review price mechanism and excise structures that would address the large price differential between legitimate and illegal products, thus removing the motivation of black market perpetrators.
RTBA Malaysia managing director Datuk Fazli Nordin said the tobacco black market has a negative multiplier effect on the nation's economy as it also funds crime, fuels corruption and undermines the nation's health agenda.
"Unfortunately, the situation is expected to get worse. In a report released by Japan Tobacco International (JTI) recently, the Covid-19 crisis has created conditions where organised criminal groups will further exploit demand for cheap goods, and capitalise on dwindling buying power, particularly in countries with high tax regimes.
"The problem is big and deep rooted and as such the solution cannot be a step-by-step measure. It has to be comprehensive and multi-pronged, curtailing the tobacco black market from a demand as well as supply stand point," Fazli said.
RTBA Malaysia is part of an international non-government organisation that aims to safeguard supply chains and brands from criminal conduct.
Further, RTBA Malaysia also expressed concern on the recent move by the Asian Development Bank (ADB) to revise down Malaysia's gross domestic product (GDP) forecast in 2020 to minus 5 per cent from minus 4 per cent previously.
ADB said that the Malaysian economy will continue to be dragged down by the adverse effects of the Covid-19 pandemic on consumption, exports, and investment.
In view of protecting businesses, jobs and livelihoods, RTBA Malaysia is putting forward a four-point proposal to the government to curtail the tobacco black market, which cost the nation RM5 billion annually in uncollected revenue and forms a significant portion of the RM300 billion shadow economy.
Including the price mechanism review proposal mentioned earlier, RTBA Malaysia is also putting forward three key proposals namely, increasing funding to the relevant enforcement agencies to recruit more personnel, conduct advanced training and provide better equipment that enhances performance and safety.
Secondly, to establish funding for a multi-agency and multi-national task force to combat the tobacco black market trade, which is a problem that has spread to other neighbouring countries.
Thirdly, to create an anti-black market fund to encourage whistle-blowers. This fund can also be used to upgrade the reporting process to improve response time and quality of action.
Fazli had previously said that the illicit trade situation remains serious but the hard work and dedication shown by local front-liners including the Royal Malaysian Police, Malaysian Armed Forces, Civil Defence Force, Royal Malaysian Customs Department and Immigration Department of Malaysia, amongst others, are both heartening and inspiring.
"We urge the government and the relevant enforcement agencies to keep up the high vigilance of our borders even after this Covid-19 pandemic has subsided.
"This would protect lives and businesses while contributing to the rebuilding of our economy," Fazli previously said.