Big Money Behind Cigarette Smuggling - Takkan Tak Ada Orang Besar Terlibat?

 First the news :

This is from Free Malaysia Today here:

Smugglers said to be offloading Thailand-bound cigarettes at sea | Free Malaysia Today (FMT)

• PJ : Smugglers offload Thai-bound cigarettes into M'sia in small boats
• cargo loaded on lorries and sold to local agents
• new smuggling tactic adopted in May after govt measures showed results
• in 2021 Budget, allowed cigarette imports at only five ports
• new import licences frozen and rules tightened
• shortage resulted in smuggled prices up by RM2-3 to RM7 to RM8 / packet 
• Prices of licensed cigarettes RM12 / packet
• many smokers switched away from smuggled cigarettes, surge in tax revenue
• contraband slip in easily because of vast coastlines 
• urged govt not to increase tobacco taxes in 2022 Budget.
• “For every 10% increase in taxes, govt loses RM250m tax revenue to smugglers
• govt currently losing RM5b tax revenue because of smuggling
• cigarette companies ceased operations in Malaysia
• causing loss of thousands of factory jobs
• Philip Morris closed operations in 2012, BAT 2016, JTI 2017
• The three companies now only import cigarettes 

My comments :

This is what I call dasar bodoh yang merosakkan segala-segalanya.

First of all despite imposing high taxes on cigarettes the smoking of cigarettes has not decreased in the country. The consumption of cigarettes has increased. But now people smoke smuggled cigarettes.

ONE OF THE REASONS WHY BN / UMNO LOST THE 2018 ELECTIONS IS BECAUSE THE CIGARETTE PRICES WENT UP. PERCAYALAH THE LARGEST GROUP OF SMOKERS ARE MALAYS - THE TRADITIONAL UMNO VOTERS.

I know people who have to smoke at least one packet of cigarettes a day - no matter what the price. No matter if they are employed, unemployed, unemployable, under employed etc - they still must smoke one packet of cigarettes a day.

Apa maksudnya Tuan-Tuan? Maksudnya sekali lagi orang Melayu jadi miskin dahulu sebab ramai orang Melayu menghisap rokok. Kena lah bayar duit lebih. Now smokers have to pay RM12 to RM17 just for a packet of cigarettes. 

So this is where the smugglers have stepped in. Today anywhere in Malaysia you can buy Indonesian cigarettes for RM6.00 to RM8.50 (including Indonesian kretek (clove) cigarettes).

That is half the price of locally manufactured, licensed cigarettes. 

Now lets look at the numbers. Now lets look again what this silly policy has done.  

Ever since the government decided to impose high taxes on cigarettes THREE tobacco companies have closed their factories here - Philip Morris, BAT and JTI. 

Thousands of jobs were lost. 

Nature abhors a vacuum. Maksudnya kalau ada vacuum, mesti ada 'angin baru' kena masuk untuk isi vacuum.

So the cigarette smugglers have stepped in to "fill in the vacuum" created by high cigarette prices caused by high taxes on cigarettes. 

Who wants to pay RM15 for a pack of cigarettes? So the Indonesian cigarettes started to be smuggled into the country.

As I said a pack of smuggled Indonesian cigarettes sells for RM6. The box is smaller but it is much cheaper.  You can buy three boxes of Indonesian kretek for the price of one box of "licensed" cigarettes. 

Now hear this : the government loses RM5 billion in tax revenus every year because of the cigarette smuggling. Smugglers do not pay taxes. 

Tuan-tuan smugglers tak bayar cukai impot. Itu pasalmereka disebut 'smugglers'. Kerajaan kita rugi cukai impot RM5 BILION setiap tahun sebab smuggler tak bayar cukai. 

Dalam Bajet 2021 anggaran kutipan hasil cukai Kerajaan kurang lebih RM160 billion. This means that RM5 billion loss in cigarette taxes is more than 3% of kutipan hasil cukai Kerajaan in 2021. That is a lot of money.

Not only that but THREE cigarette manufacturers (BAT, JTI, Philip Morris) have shut down. They also paid millions of Ringgit in taxes to the Government.  Semua hilang.

So please keep increasing the taxes more and more. Elok Kerajaan letakkan cukai baru, naikkan cukai lama, bubuh cukai 'sunlight tax' - bila buka tingkap rumah pada waktu pagi, kena bayar cukai panas matahari.  Just tax everything.

The analyst says for every 10% increase in cigarette taxes the Government loses RM250 million in tax revenues.

Ok now we come to the really sad part.

If the "lost" taxes alone on smuggled cigarettes add up to RM5 billion then what is the total volume of smuggled cigarettes? RM5 billion? RM10 billion?  

Kalau cukai impot saja yang "hilang" (akibat smuggling itu) berjumlah RM5 bilion, habis berapa besar pula nilai Ringgit bagi rokok yang di smuggle masuk? Mesti lebih daripada RM5 Billion. Mungkin RM10 billion.

Maksudnya this is not an industri kecil-kecil atau industri saiz sederhana. This is not SME type business.

Billions of Ringgit worth of cigarettes are being smuggled into the country.

New factories would have been built in Indonesia to meet the demand for smuggled cigarettes in Malaysia. New trucks, boats and even ships may have been purchased to cater for this demand.

And this size of smuggling operation has to involve big boys with big money, big connections and big muscle on both sides of the Straits of Melaka. 

This size of cigarette smuggling has to involve the big people - again. 

The more cigarette taxes that are imposed by the government the more cigarettes will be smuggled in. The more money will be made by the smugglers and the big boys.

The more "rasuah" money they will pay to smuggle the cigarettes because for a certainty there must be corruption involved.

Are you telling me that all these cigarette smuggling that is going on does not involve rasuah? You must be out of your mind. This is Malaysia ok - the world capital of corruption.  

Certainly the kaum 'makan rasuah' are very happy if the Government imposes high taxes on cigarettes. Their "earnings" will go up.

My suggestion is cut the taxes on cigarettes. Let the local cigarette manufacturers operate again. Bring down the prices of locally manufactured cigarettes.  Then the cigarette smuggling will die a natural death. Government tax revenue will improve.

Folks, I am not promoting cigarette smoking. Jangan salah faham. 

But the reality is this whole idea of taxing cigarettes sky high and making cigarettes so expensive HAS NOT REDUCED smoking at all. Cigarette smoking has possibly increased.

Instead it has closed down cigarette factories, shut down thousands of jobs, caused the government to lose at least RM5 billion in tax revenues (or more) plus it has created a huge smuggling industry where there must be big time rasuah involved.

Big money, big muscle, big corruption.   

This is not Switzerland or Finland where there is very, very little corruption. This is Malaysia. In Malaysia rasuah is the de facto religion. Rasuah sudah jadi akidah.

So bila rasuah sudah masuk akidah, the more taxes, the more red tape, the more licenses required, the more permits that need approval then the more rasuah you will get. 

And the more the government will lose tax revenues.

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