British American Tobacco Malaysia hopes for Budget 2011 to reflect a continued balanced approach in tobacco taxation to hinder massive illicit cigarette market

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Petaling Jaya, 8 September 2010 – British American Tobacco Malaysia (BAT Malaysia) hopes that the upcoming Budget 2011 announcement will continue to reflect a balanced moderate and gradual excise increase regime as per the previous year in view of the widespread presence of smuggled cigarettes in Malaysia. Illicit cigarettes in Malaysia have increased from 14.4% in 2004 to current level of 37.5% and will very likely continue to increase due to further tax-led wide price gap increases between legal and illegal cigarettes.

Commenting on the matter, William Toh, Managing Director of BAT Malaysia said, “The burgeoning black market has become a daunting challenge to our industry. It is a lucrative multibillion dollar trade that deprives the Government of much needed tax revenue, impacts legitimate tobacco industry and undermines health agenda by making cheap smuggled cigarettes available.”

“BAT Malaysia is not opposed to excise increases but we advocate a moderate and gradual taxation approach. The recent announcement of possible implementation of Cess on tobacco products by the National Kenaf and Tobacco Board is another form of tax, on top of excise and sales taxes, that will most certainly lead to higher price differentials between legal and illegal cigarettes and further fuel the smuggling of illicit cigarettes into the country. As such, we hope that the Government will take into consideration the impact that excise or any additional tax on cigarettes will have on illicit trade with consequent adverse effects on the legal industry,” Toh said.

Toh also commented that the enforcement authorities are doing a good job in trying to contain the marauding illicit trade. However, with something as lucrative as illicit cigarettes, errant operators will find any means possible to continue with their illicit trade. This menace must be combated through a holistic approach which includes not only enhanced and relentless enforcement but also stricter penalties when illicit traders are caught.

About British American Tobacco (Malaysia) Berhad

British American Tobacco (Malaysia) Berhad (British American Tobacco Malaysia) emerged on 3rd November 1999 from the merger of Rothmans of Pall Mall (Malaysia) Berhad and Malaysian Tobacco Company Berhad. These two long established tobacco companies brought with the merger, experience and an unrivalled portfolio of highly successful international brands to create the largest tobacco company in the country.

British American Tobacco Malaysia manufactures and markets high quality tobacco products designed to meet diverse consumer preferences. Brand portfolio includes well-established international names like Dunhill, Kent and Pall Mall. British American Tobacco Malaysia has about 1,600 employees who are involved in the full spectrum of the tobacco industry, from leaf buying and processing to manufacturing, marketing and distribution.

British American Tobacco Malaysia is part of the British American Tobacco group, which is the world’s most international tobacco group and the second largest stock market listed tobacco group by global market share.

For more information, please contact British American Tobacco Malaysia:

Mr Chin Tuck Weng, Corporate Affairs Manager at 03-7941 7318 or
Mr Daniel Lui, Corporate Communications Manager at 03-7491 7311 or