British American Tobacco Malaysia - What is the impact on Malaysia?

Lost tax revenues

The illegal cigarette study conducted by Kantar IMRB revealed that the illegal cigarette trade has overtaken half the cigarette market reaching 58.3% in 2017 with estimated annual volume of 12 billion sticks, for which taxes/duties are evaded.

As a result, the Government is estimated to lose approximately RM5 billion in excise revenue annually.

Effects on public health

Illegal cigarettes undermine public health initiatives to curb tobacco consumption and underage smoking because it makes tobacco very accessible at extremely low prices. Unlike legal cigarettes which are manufactured and sold in compliance with strict regulated requirements such as depicting graphic health warnings, abiding by the minimum cigarette price at retail and complying with maximum tar and nicotine levels, illegal cigarettes blatantly disregard such regulations.

Criminality

Illegal cigarettes trade encourages criminality, social ills and possible funding of terrorism activities, as widely reported by the international media*. It is worth billions of dollars worldwide and it's increasingly dominated by organised crime. It is a scourge that has to be addressed through continuous and increased enforcement and harsher penalties on offenders.

The illicit trade in tobacco is not a victimless crime. These films show more about the consequences of illicit trade and how regulatory measures such as plain packaging could see the problem increase worldwide.

* Tobacco Underground, Special Report by The Centre for Public Integrity

*Illicit Trade: A Security Challenge – A Case Study of Cigarette Smuggling” Dr. Louise Shelley, ITIC Conference Paper, 2009