JTI Malaysia Asked Authorities For Policy Against Illicit Cigarettes

Source from:  Vapingpost 01/28/2021

Last November, JTI’s Managing Director Cormac O’Rourke, said that besides the RM5 billion loss in revenue faced each year, Malaysia must also take into account the losses from illegal vaping, which he said are estimated at RM2 billion annually. He said that authorities should consider a ban on the transhipment of cigarettes, and designate a single point of entry to support enforcement efforts better.

He added that in order to prevent further losses, the government should continue the moratorium on tax excise increase. “Certain quarters are calling for a tax hike on tobacco products in the upcoming Budget 2021, but we must caution the government in the strongest possible manner not to impose any tax excise increase on tobacco products. This will only serve to worsen the situation and further damage legitimate retailers’ businesses which are already under pressure.”

“An excise hike this year would widen the price gap between legal and illicit trade and will inflict damage on the legitimate industry and small and medium-sized enterprises (SMEs) alike,” he added.

“I think there is a real need now to support SMEs. The Finance Ministry has the opportunity to do so by allowing third duty payment for the legitimate tobacco sector. This will improve the cashflow for the legitimate tobacco sector, and we can pass this on to our SME partners. Many of these 60,000 retailers are struggling now when it comes to liquidity,” he explained.

Cigarette import licences frozen

Shortly after these statements, local authorties had announced that the issuance of new cigarette import licences had been frozen, and that transit activities would only be permitted through five ports; West and North Port in Port Klang, Selangor; Tanjung Pelepas Port, Johor; Sandakan Port, Sabah and Senari Port, Sarawak.

Moreover, Malaysia’s Finance Minister had announced an excise tax on all tobacco products and electronic/vaping products, at a rate of 10% of the value of the products and one of 40 sen per ml on e-liquids. “Electronic cigarettes liquid too will be subjected to an excise duty at a rate of 40 sen per millimeter,” said the Finance Minister during the tabling of a 2020 budget session.