Malaysia: Cigarette Price Hike May be Spared in Budget 2015

Source from:  The Rakyat Post  06/25/2014

While smokers in Malaysia brace themselves every year around September for tobacco taxes to be hiked up, chances are such a disincentive for the smoking habit is unlikely this year ahead of the Budget 2015 announcement.

Even so, cigarette prices will still go up with the Goods and Service Tax (GST) come April 1 next year and the "sin tax" will kick in only in Budget 2016.

This is because cigarettes are highly unlikely to be within the list of essential items to be exempt from GST, even though the government has yet to reveal exactly what those items will be.

Using the RM12 per 20-stick pack as a reference point, the 6% GST effectively adds 72 sen to the price. The same principle applies to other lower priced cigarettes.

The GST to be imposed on cigarettes will be a marked change from the way this commodity is priced today, costing effectively the same wherever you buy a pack – from convenience stores to supermarkets.

About the only places where you get charged more is when you buy a pack at hotels and some selected restaurants as the 10% plus 6% sales tax and service tax are slapped on.

And while only outfits with annual revenue of RM500,000 are supposed to charge GST on the items they sell, cigarettes are expected to be among the exceptions as prices are set by the suppliers.

This means there's no escaping the GST on cigarettes. Enditem