BAT managing director Erik Stoel said that he was informed during a meeting with health ministry officials that Putrajaya was expecting a price increase of about RM1.
But Stoel said this ignored the fact that SST was a replacement of the goods and services tax (GST).
“It is also inconsistent with the recent statement by the health minister that the ministry is looking at determining the recommended ceiling price to equalise and control cigarette prices across the board.”
Stoel lauded efforts by the police and Customs to stop the illicit cigarette trade.
He hoped more would be done to fight illicit cigarettes trade including introducing tougher laws.
Tobacco companies have always said that any increase in cigarette prices would encourage the public to switch to illicit cigarettes.
“We believe that this is a critical component in the fight against the illegal trade market and we hope to see that materialise in the current Parliamentary session,” he said.
He said the cigarette market registered a 1% volume growth in the third quarter of this year compared with the corresponding quarter last year, but the share of the illegal cigarette trade was still at a high of 63% of total consumption in Malaysia.
Recently, think tanks Galen Centre for Health and Social Policy and the Institute for Democracy and Economic Affairs warned that another hike in tobacco prices would further fuel the growth of illicit cigarettes.