Stop taking revenue from sin taxes, economist says on tobacco trade

Stop taking revenue from sin taxes, economist says on tobacco trade

Ramon Navaratnam says it is counter-intuitive to continue profiting from the tobacco industry.

KUALA LUMPUR:
A veteran economist has urged the Pakatan Harapan (PH) government to do away with collecting revenue from tobacco products, saying the issue has become a matter of national concern.
Ramon Navaratnam.

Asli Centre for Public Policy Studies chairman Ramon Navaratnam told FMT there were other better ways for PH to raise revenue from the taxation system, adding that profiteering from the tobacco industry had its drawbacks.

“For every dollar you earn, you waste 25 dollars rehabilitating the sick. This will ultimately lead to a net loss,” he said.

He was responding to concerns raised at a recent round-table discussion that tax revenue from the contraband cigarette market, which has reportedly caused government losses of RM4 billion per year, would pressure Putrajaya into tackling the issue.

The former Treasury secretary-general said the issue had not been a big concern during his stint in government.

He also welcomed the health ministry’s announcement that all open-air restaurants would be gazetted as no-smoking zones by December.

He pointed to the success of similar no-smoking zones gazetted in the past, such as in the Sunway area.

Such proposals would not have been accepted during his time with the civil service, he said.

“Now we see direct links of cancer and many other diseases to smoking that is proven by research. Before this, we suspected it, but whenever we came out against smoking, we were shown counter-research.

“Of course, some people are also paid to do research. I learned a new term today, mercenary researchers,” he told FMT when met after the roundtable discussion hosted by Asli at the PAUM Clubhouse in Damansara.

Asli had also launched a policy paper on the illicit tobacco trade in Malaysia and proposed measures for the government to curb the spread of contraband tobacco products.

Navaratnam said he foresaw no problems arising from the health ministry’s decision on no-smoking zones despite the controversy sparked in some quarters.

He added however that ministry officials had to be determined in implementing and enforcing the initiative.

“People will soon demand that restaurants follow their ruling, and won’t go in unless they listen. That’ll be the best lesson.”

When asked about concerns over the response PH might receive to its decision, Navaratnam said it was time that the government did what was needed by the people instead of “pussyfooting” on the matter.

Adding that it was a matter of political will, he said if PH was unwilling to take “the high road” and be more assertive, it risked losing votes in future elections.

“The time will come when the public will say, ‘We won’t vote for you unless you stand and fight for us’.”

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