Saturday September 2, 2006
More sin taxes for healthy lifestyle
THE excise duty for cigarettes will be increased by one sen per stick while liquor with more than 40% alcohol will see an increase of RM5 per litre with immediate effect.
The move is to promote a healthy lifestyle among Malaysians.
The previous excise duty rate for cigarettes, cheroots, cigars and cigarillos containing tobacco or tobacco substitutes was RM110/kg plus 20% or 11 sen/stick plus 20%. This has now been increased to RM120/kg plus 20% or 12 sen/stick plus 20%.
British American Tobacco Malaysia managing director Bart Alkemade said that retail prices of cigarettes are expected to rise with the increase in excise duty. The revised retail prices for cigarettes will be announced next week.
“We believe the increase, coupled with heightened penalties on smuggling and enhanced enforcement manpower as announced today, is a measure that should meet the Government's health agenda. But it would not affect the illegal cigarette segment much,” he said.
Alkemade said the market share of illegal cigarettes had expanded from 14% in 2004 to 21.5% as at March 2006 following the previous tobacco taxation increases.
However, the Malaysian Council for Tobacco Control (MCTC) is disappointed with the “very slight increase” in tobacco tax.
“Why bother?” said MCTC deputy president Dr Molly Cheah, who added that the price increase was only a 3% rise based on a pack of 20 cigarettes.
“By raising the tax by 1 sen per stick, any money made is wiped out immediately by the additional health care cost because of diseases due to cigarettes,” she said.
Dr Cheah said the main purpose of increasing tax is to make cigarettes unaffordable, especially for the youth.
She noted that the Government was giving the public the impression that it was protecting the tobacco industry.
The Confederation of Malaysian Brewers Bhd (CMBB) heaved a sigh of relief that excise duty on beer and stout was not increased.
“Three consecutive years of increases in excise duties, which amounted to almost 50%, exerted tremendous pressure on the already difficult, challenging and competitive environment in which we operate,” it said in a statement.
The statement added that another round of excise duty increase would have led to the widening of the price of beer and stout in Malaysia with other markets in the region, which would have led to more smuggling.
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