KUALA LUMPUR: As 2022 Budget beckons, British American Tobacco (Malaysia) Bhd has urged the government to consider implementing further measures to clamp down on the tobacco black market through enhanced enforcement initiatives.
BAT Malaysia is hopeful that the government will maintain tobacco excise to not further increase the price gap between legal products and those in the black market.
The company also called for the introduction of a risk proportionate taxation and regulatory framework for reduced-risk products such as nicotine vapour.
BAT Malaysia managing director Nedal Salem lauded the government's previous efforts in 2021 Budget to fight the tobacco black market which had since shown success.
The results of the preliminary measures can be seen through the Nielsen's Illicit Cigarettes Study in Malaysia May 2021 where the incidence of illegal cigarettes has decreased by 5.9 percentage points, from 63.8 per cent in 2020 to 57.9 per cent in May 2021."
However, criminal syndicates are now circumventing these enforcement efforts by smuggling through coastal routes, utilising private jetties and unofficial landing spots along Malaysia's long coastline.
"Media reports show that the Marine Police has seized more than RM220 million of smuggled items from January to June 2021, compared to RM55.75 million for the same period last year. More than 70 per cent of these were illegal cigarettes and liquor followed by drugs," Salem said in BAT Malaysia's wishlist statement today.
"In the upcoming Budget 2022, we would like to call upon the government to enhance enforcement at these coastal area weak spots while maintaining the current stay on tobacco excise to address the price gap between the legal and black markets."
Given the affordability pressures brought on by Covid-19, a wider price gap would certainly increase the demand for illegal cigarettes and the lucrativeness of smuggling, he added.
On its call for the establishment of risk proportionate regulation and taxation for reduced-risk products, BAT Malaysia said currently, there were more than one million vapour users in Malaysia using unregulated products.
"It is important for regulations to be introduced to ensure vapour users have access to products that
are regulated and compliant to quality and safety standards.
"Taxation and regulations also need to be evidence based by taking account of the reduced-risk nature of these products but does not treat them in the same way as conventional cigarettes. This will then give consumers access to scientifically substantiated, reduced-risk alternatives," Salem said.