Locally-produced liquor to cost more after 150pct tax hike

The price of locally-produced liquor is slated to increase as Putrajaya has imposed a 150 percent hike on the excise tax.

Malaysian Bottling Association chairperson Yeo Eng Chiang said effective Dec 16, the price of one litre of pure alcohol will increase from RM23.92 to RM60.

Yeo said this meant that the retail price for a 700ml bottle of locally-produced liquor will cost RM30 instead of RM20, while the retail price of medicinal liquor will go up from RM2.50 to RM4.

The hike was imposed by the government on Oct 10 and a grace period was later given, until Dec 15, for producers to clear their old stocks.

However, he said, no excise tax hike was imposed on imported liquor and beer.

He said this was the first excise tax hike on locally-produced liquor for the first time in 12 years but added that the increase was too drastic.

"The increase is too high. It’ll be difficult for consumers to absorb," Yeo told a press conference in Kuala Lumpur today.

If the government went ahead with the 150 percent hike in excise tax, he said, the sales of locally-produced liquor is expected to tumble by about 60 percent.

He also expressed concern that the increase would fuel liquor smuggling and black market sales.

"Even based on the current estimates, due to the high tax burden, the illegal liquor market is twice as big as the legal market," he said.

Yeo said the association had previously appealed to the Finance Ministry to review the decision to raise the excise tax hike so high, but to no avail.

He appealed for the Finance Ministry to consider a more "reasonable" excise tax rate.- Mkini