Anwar also announced the tax on sugar-sweetened beverages will see an increase, from 40 sen to 50 sen.
PETALING JAYA: The government has announced it will impose an excise duty on chewing tobacco at a rate of 5% plus RM27 per kg under Budget 2024.
Prime Minister Datuk Seri Anwar Ibrahim said this would be similar to the excise duty applied to snuff.
Chewing tobacco is said to have a very niche market, with not many of the younger generations choosing to opt for it as opposed to cigarettes or vapes.
The move to tax smokeless tobacco has not been in line with what anti-tobacco groups have been calling for, which is to raise cigarette taxes.
The last increase in cigarette excise duty took place in 2014 at 12%.
However in 2015, a cigarette excise of more than 40% was imposed again by the government, causing many tobacco companies to express shock and disappointment.
British American Tobacco (M) Bhd
had said the extreme hike in cigarette excise done against the backdrop of both weakened economy and consumer sentiment will definitely further fuel an already high level of illegal cigarettes, where one in three packs are illegal.
The government, on the other hand, took measures in 2021 that included the freezing of new import licence for cigarettes, tightening the renewal of import licence for cigarettes through a review of licence conditions, among other efforts.
Anwar said enforcement agencies will continue to intensify joint efforts dealing with revenue leakage while the cooperation between relevant agencies will be enhanced.
The Malaysian International Chamber of Commerce & Industry (MICCI) president Christina Tee said they commend the government for its commitment to strengthen controls against smuggling and illicit trade to recoup lost revenue.
“The industry is supportive of holistic actions that endorse legitimate businesses and trade. We are confident that the Multi Action Task Force is able to design and orchestrate effective strategies that can be implemented by relevant enforcement agencies with a common aim to stamp out the illicit trade industry,” it said in a statement.
Meanwhile, Anwar also announced the tax on sugar-sweetened beverages will see an increase, from 40 sen to 50 sen during Budget 2024.
“The revenue generated from this excise duty will be used for the treatment and management of diabetes, as well as support for dialysis centres,” he said.
The Sugar Tax was initially introduced in 2019 at 40 sen per litre and was set to include carbonated drinks, flavoured and other non-alcoholic beverages that contained more than five gram of sugar or sugar-based sweetener per 100ml.
