PUTRAJAYA: All locally-manufactured cigarettes will be required to display tax stamps on their boxes effective Oct 1.
In a statement today, the Customs Department said the transition period for the tax stamps will be done beginning Aug 1 to Sept 30.
"Current boxes with security ink markings will only allowed to be sold in the market until March 31, next year.
"After the deadline, manufacturers must recall all their unsold cigarettes," it added.
Failing to do so will lead to the department confiscating all cigarettes and the manufacturer will be charged under Section 74 of the Excise Act 1976.
The act stipulates a fine of not less than 10 times the amount of the excise duty, and no more than 20 time of the amount of the excise duty or a jail term of not more than three years, or both for the first offence.
For the second offence, the act stipulates a fine of not less than 20 times of the amount of the excise duty and not more than 40 times the amount of the excise duty, or a jail term of not more than five years, or both.
The manufacturer may also be charged under Section 89 of the Goods and Services Tax Act 2014 which brings a penalty of not less than 10 times and not more than 20 times of the tax amount and jail term of not more than five years or both for the first offence.
For the second offence, it includes a fine of no less than 20 times and not more than 40 times of the taxable amount and a jail term of not more than seven years or both for the second offence.
The objectives of the tax stamp usage on the cigarettes is to comply with international standards for the collection of excise duty, and to safeguard the country's revenue, the department said.
The department said the move is also geared towards complying with the World Health Organisation Framework (FCTC), in which stamp duties are equipped with a 'Track and Trace' system, enabling effective monitoring of tobacco supply.
The department also urged the public to report any smuggling activities and illegal sale of cigarettes through its hotline at 1-800-88-8855.