The RM300bil shadow economy

Hendrik Stoel

THE weak results of British American Tobacco Bhd (BAT Malaysia) and the sharp comments made by its outgoing managing director Hendrik Stoel against the government on Feb 20 highlights the need for Malaysia to act promptly to reduce its huge shadow economy.

For the full year of 2019, BAT Malaysia’s net profit fell 26.96% year-on-year to RM343.81mil, while revenue declined 11.14% to RM2.51bil. This marks the group’s fourth consecutive year of decline in performance.

The MNC has cast blame on illegal cigarette trade that it said currently makes up 63% of the total industry volume, up from 33.5% in 2015.“The legal (cigarette) industry has diminished by almost 40% in the span of four years since 2015 due to the illegal cigarettes trade.