More coordinated action needed to curb illegal cigarettes

Tobacco firm JT International Bhd (JTI Malaysia) is calling for more coordinated action to tackle the growing illegal cigarette trade in the country.

Managing director Cormac O'Rourke said Malaysia had the highest illegal cigarette trading level in the world at 58.9 percent of the market, based on the 2018 illicit cigarette study conducted by research house Nielsen and commissioned by the Confederation of Malaysian Tobacco Manufacturers.

"Decisive measures are needed to contain contraband trading before the situation deteriorates further. All indications from recent studies and reports from the market, as well as our observations on the ground, suggest that the situation is not improving and we are projecting that the government will likely miss its revenue collection targets from the industry in 2019,” O'Rourke said in a statement yesterday.

While the government had passed laws in recent months increasing the penalties against contraband trading, he said this must be accompanied by strong action and enforcement at ground level if the government was to have any success in stemming the tide of 12 billion sticks of illegal cigarettes flooding into the market.

The tobacco company reiterated its earlier calls for the government to implement measures, among others, an excise tax moratorium for the next three years, to avoid any further price shocks leading to more smokers switching to illegal cigarettes and to also allow for enforcement action to take hold.

The company also proposed a ban on trans-shipment for cigarettes at entry points in Malaysia, which has been manipulated to bring illegal cigarettes into the country.

"Furthermore, there should only be a single point of entry for any importation of cigarettes into Malaysia. The aim is to avoid the manipulation of processes and procedures and enable better focus and monitoring of cigarette importations into the country," it said.

The company also proposed the establishment of an independent body to lead a special task force on addressing illegal cigarette sales comprising multiple relevant government agencies including industry representatives to ensure a comprehensive approach.

O'Rourke said JTI Malaysia was monitoring the situation closely and was prepared to discuss further with the government on its proposals.

- Bernama