KUALA LUMPUR: Illicit cigarettes prevalence in Malaysia has dropped by 6.5 percentage points from an all-time high of 63.8 per cent in 2020, according to the Illicit Cigarettes Study (ICS) in Malaysia 2021, conducted by international market research company Nielsen.
This is the first time since 2014 that illicit cigarettes prevalence has registered a decline.
Confederation of Malaysian Tobacco Manufacturers (CMTM) said that despite the decline, more needs to be done to address the issue because the government continues to lose billions of ringgit every year from unpaid taxes on illicit cigarettes.
"This indicates that the measures announced by the finance minister in Budget 2021 are starting to bear results," said a CMTM spokesperson.
"This is an encouraging development, and CMTM urges the government and all stakeholders to continue all efforts to curb the illicit cigarette trade."
The illicit cigarette prevalence of 57.3 per cent is still very high, and Malaysia remains the number one country for illegal cigarettes and smuggling syndicates are reacting to those Budget 2021 measures by employing new methods to bring the illicit cigarettes into Malaysia.
CMTM calls on the government to further enhance its enforcement to address continuous smuggling activities, especially in coastal areas, and ensure those Budget 2021 measures are maintained and enforced.
This includes a closer collaboration between the industry and the government to address tobacco smuggling activities through the Multi-Agency Task Force (MATF).
CMTM also calls on the government to conduct a detailed regulatory and economic impact analysis and to engage all stakeholders across the entire value chain, including manufacturers, distributors, and retailers, before introducing proposals such as the Tobacco End Game 2040, for it may inadvertently increase illicit products in the market and eroding the hard-won gains in tackling the illegal cigarette trade in Malaysia.