SMOKERS and drinkers have to fork out more to enjoy their drag and glass of beer or liquor under the proposed increases in import and excise duties to encourage a healthy lifestyle among the people.
The Government will increase by 20% the import and excise duties on cigarettes and other tobacco products and use special stickers or banderol and security ink to curb smuggling.
As for alcohol, there would be an increase of 10% for the import and excise duties on liquor with similar anti-smuggling measures taken.
When contacted, tobacco industry players expressed concern that the increase in excise duties for cigarettes and other tobacco products would only encourage the trade in contraband.
Confederation of Malaysian Tobacco Manufacturers’ chief executive Shaik Abbas Ibrahim said the move to increase the duties would mean that the Government would not have the chance to reap any benefit from the loss of revenue from smuggling.
“In real terms, consumption of duty-paid cigarettes will reduce but consumption of smuggled cigarettes will continue to increase.
“Ultimately, the Government’s objective of reducing consumption will not be realised.”
Shaik Abbas said the industry was surprised at the increase as it had proposed to the Government that it implement an annualised moderate tax increase.
“Ideally, any excise increase should only come after full implementation of the security ink and banderol initiative.
“One must not forget that this initiative will cause manufacturers to incur a huge expense.
“To date, the security ink marking for cigarettes manufactured in Malaysia for domestic consumption and banderols for imported cigarettes announced during the previous Budget have yet to be implemented.”
Fomca president Prof Datuk Hamdan Adnan said the increase was good, as smoking contributed to bad health and social ills.
“The 20% is still low because smokers are going to keep on smoking.
“And the problem of alcoholism should be looked into,” he added.
CAP president S.M. Mohd Idris said the increase for cigarettes and other tobacco products was not enough, as rebates given to the industry last year would offset the cost for them now.