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Study: Malaysians' Illegal Smoking Habits Are Costing The Country RM5.1bil Yearly

The tax from legally sold cigarettes could help with the economy.


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Study: Malaysians' Illegal Smoking Habits Are Costing The Country RM5.1bil Yearly

We all know that smoking is not exactly good for physical or financial health, but to each their own, right? 

However, when you find shortcuts to save on your habit that costs the country some additional revenue, it becomes a problem. 

According to a recent study by Oxford Economics, 12 billion illegal cigarettes are smoked by Malaysians each year, costing the country RM5.1 billion in taxes annually. 

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The sale of illegal cigarettes have gone up significantly since the previous government increased tobacco tax by 40 per cent in 2015.

The report, commissioned by British American Tobacco (which, incidentally closed its factory here together with the Japan Tobacco International, causing over 5,000 people to lose their jobs), also stated that despite strong economic growth, Malaysia experienced a real decline in tax collected between 2018 (RM174.7 billion) and 2017 (RM179.5 billion) - a difference of RM4.8 billion. 

Oxford Economics Director of Economic Impact Consulting, Europe and Middle East Pete Collings said with nearly 60 percent of consumption falling outside of legitimate channels, the government’s ability to achieve its revenue and health targets is being severely compromised.

Mathew MacQuarrie on Unsplash
"But the damage caused by the illicit tobacco trade goes far beyond unpaid excise duties and sales taxes.

"The illegal trade, and the syndicates that prosper from it, spreads further illegal activity within Malaysia, encouraging corruption and discouraging legitimate business practices throughout the economy," he said. 

Why should this matter to you as long as you can save money during these hard times, you ask?

Well, the government needs money to run the country and provide public services.

If we want the government to do better, we have to be better and play our parts as well. 

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Of course, we don't condone smoking and we still think that you should quit puffing once and for all, because health.

But if you find it hard to kick the habit, at least try to do it legally lah. The more the government collects, the sooner they can abolish all tolls.


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