JTI Malaysia warns that the sales share of illegal cigarettes sold in Malaysia may rise to 70% by the end of the year. Currently, some say that the contraband rate there – at 62.3% -- is the highest in the world.
Azrani Rustam, JTI Malaysia’s director of corporate affairs and communications said JTI anticipates demand for contraband products will due economic fallout of the Covid-19 pandemic according to a report in Free Malaysia Today.
“Based on the increasing trends captured in the illicit cigarette study conducted by Nielsen…the illegal cigarette trade is heading towards the 70% level by the end of 2020 unless further comprehensive and deterrent actions are taken collectively by various government and law enforcement agencies,” he said. Black market consumption hit an estimated 12.2 billion sticks last year.
Azrani said that the re-establishment of the Multi-Agency Task Force (MATF) last month would serve as a key tool to combat the illegal cigarette problem which cost the country about RM5.0 billion (US$1.2 billion) in uncollected tax revenue in 2019.
Azrani said the illegal cigarettes arrived at the many ports in the country.
“They are brought here in containers and declared as non-taxable goods destined for neighboring countries. Before leaving for their designated ‘destinations’, these containers are smuggled out into the Malaysian black market,” he said.