PETALING JAYA: The taxes levied on cigarettes and tobacco products at all duty-free islands and zones is the right move as it will reduce demand for these products, say anti-smoking groups.
Federation of Malaysian Consumers Associations (Fomca) coordinator for tobacco control and Malaysian Council for Tobacco Control secretary-general Muhammad Sha’ani Abdullah said the taxes imposed are “long overdue”.
“Malaysia is a party to the World Health Organisation’s Framework Convention on Tobacco Control that requires countries that signed on to implement the requirements under the convention. The convention requires the country to implement demand and supply reduction strategies.
“One of the ways of demand reduction is by increasing the price by way of additional tax. There should not be any tax-free status for any tobacco products under the convention. We welcome the move to abolish tax-free status for tobacco products in Malaysia. It is a long overdue decision, ” he said.
Muhammad Sha’ani said the increase of prices of tobacco products has been proven numerous times to help reduce demand, adding that the price increase will also help low income groups to stop smoking.
“It won’t be 100% (to help them to stop smoking) but those who care about their families will stop and those who don’t will carry on, ” he said.
Muhammad Sha’ani said tobacco companies would clearly be against increasing the price as it will affect their market as smokers will reduce smoking.
Malaysian Women’s Action on Tobacco Control and Health president Roslizawati Ali said Malaysia is one of the cheapest countries for cigarettes and has not increased taxes in the past five years.
“This time, they (the government) only agreed to tax the duty-free cigarettes. The taxes that are put in place will allow us to be positioned the same as other countries.
“We are allowing other people to take advantage of our cheap prices. You have people from Singapore coming to buy and that is a loss in taxes, ” she said.
On complaints about smuggling and illicit cigarettes, Roslizawati said the taxes obtained can be used to better the enforcement services, the equipment, and measures to tackle these problems.
She pointed out that with cheap cigarette prices, it will also open up opportunities for children to purchase them.
However, Malaysian Medical Association president Datuk Dr Subramaniam Muniandy believed that the taxes on the sale of cigarettes and tobacco products at duty free islands and zones will not have a significant impact on cigarette consumption.
“Higher taxes across the board on all cigarette and tobacco products are more effective and proven ways to discourage the habit of smoking, ” he said.
With the taxes imposed on vaping or electronic cigarettes, Dr Subramaniam said it will affect consumption as it may become less affordable to a certain extent, thus discouraging the habit and the sale of these products.
“Taxes alone aren’t enough. Educating the public, especially among youths, is still needed. The ‘Tak Nak’ campaign by the Health Ministry should be expanded, ” he said.
Meanwhile, Malaysian Association of Tour and Travel Agents (MATTA) president Datuk Tan Kok Liang said that the imposition of taxes by the government was “ill-timed” although the impact would “not be significant”.
Tan said the duty-free status of cigarettes and tobacco products is a “draw card” on duty-free islands.
“As the government is encouraging domestic tourism, why not let everything settle down first and impose it in 2022? Now they are taking away the small privilege from those islands.
“Malaysia is looking to domestic travellers to kick-start the tourism sector, ” he said.
Separately, JTI Malaysia’s Cormac O’Rourke said the duty-free market is much smaller than the domestic market in terms of volume.
“The increased scrutiny by the government on the activities at duty free islands is understandable, nevertheless the specific coverage of the shift from duty free to duty paid locations needs to be clarified, ” said the managing director of the tobacco company.
“Duty free sales serves a key commercial purpose and in highly controlled areas, such as at international airports, should continue to remain, ” he said.
O’Rourke added that measures to tax vape liquids were in line with many countries all over the world where vaping is regulated.
However, he pointed out that vaping remains completely unregulated, estimating that illegal vaping has more than doubled over the last few years and the government loses about RM1bil annually in tax revenues.
“Enforcement plays an important role here – the fact remains that reputable online shops and brick and mortar stores are selling these products openly, ” he said.
Philip Morris (Malaysia) Sdn Bhd managing director Naeem Shahab Khan said the taxes imposed will not impact them as duty-free islands and zones were being managed by a different entity.