Managing director Khoo Been Lend, during a presentation with the media today, urged the government to stand firm in its policies, which have shown early success with the prevalence of illicit cigarettes dipping for the first time in six years, in May 2021.

The latest Illicit Cigarettes Study (ICS) showed the extent of illegal cigarettes fell to 57.9% compared to 64.1% in December 2020 – a reduction of 6.2%.

“This is the first time the incidence of illicit cigarettes decreased since 2015.”

Khoo said the drop was a testament to effective government policies introduced in Budget 2021, including halting the issuance of new import licences, tightening the renewal of import licences, limiting transhipment of cigarettes to only five dedicated ports and imposing taxes on the import of cigarettes with drawback facilities for re-export.

“It is imperative that the government remains steadfast in its policies when facing opposition by parties with vested interests to have those policies revoked,” she said.

She also urged the government to retain current excise tax rates, as any tax hike would reverse the positive trend.

She said higher taxes on legal cigarettes would increase price differentiation, pushing consumers to buy cheaper illicit cigarettes.

She added that the government and enforcement agencies should act against new emerging threats, as mid-ocean off-loading, barter and fishing boats, private jetties and unofficial landing spots are now being used to evade new restrictions on illicit cigarette trade.

“Stepping up efforts on seizures and enforcement are key to fortifying the borders and entry points.”

JTI Malaysia also repeated its previous calls to tax vape liquids, adding that the volume of nicotine liquids smuggled into Malaysia is now equivalent to 12.5 billion cigarettes.