Attempts intended to reduce smoking by imposing higher taxes on cigarettes backfired mainly because they had very little impact but contributed to an increased intake of illicit cigarettes. Malaysia will be the world’s largest consumer of illicit cigarettes, with 1,000 packs sold every minute.
A written report by Oxford Economics on tobacco found out that the illicit cigarette trade cost Malaysia almost RM4.8 billion in excise duties this particular past year. Another study said Malaysia is considered the largest consumer of illicit cigarettes across the globe, you will discover over 12 billion sticks sold during the past year. Oxford Economics estimated that 58.9 percentage of all of the cigarettes purchased from Malaysia were illegal.
RM 1 Billion Illicit Cigarettes Confiscated
With Malaysia losing billions in revenue, its enforcement agencies are unable to stem smuggling efforts by conducting raids at border checkpoints. The Customs Department reported that RM1 billion price of illicit has become confiscated until now this season. The staggering sums show how lucrative the trade is to crime syndicates.
Merely Scratching On Top Of The Problem Due to Bribery & Corruptions
These initiatives merely diminish the problem. To battle the illicit tobacco trade, an all-out war should be applied. Smuggling syndicates are able to circumvent legislation and enforcement through bribery. Oxford Economics warned that rising corruption can dampen Malaysia’s interest global investors.
Remember that it is reported that 80 per cent of security and the authorities personnel at Malaysia’s borders are corrupt. Contraband cigarettes are raking in a great deal profits for Malaysian smuggling syndicates that they will be in a position to funnel the cash to more smuggling operations and other types of criminal activities.
The Profitable Business is Financing the Terrorist
Profits on the illicit cigarette trade may possibly also be financing terrorism. Malaysia’s Home Ministry and crime prevention groups are beginning to draw in connections between terrorist organisations additionally, the booming illicit cigarette business. It happens to be thought that these organizations are utilising Malaysia as their base to raise funds.
To the smugglers, bribing the border officers is small price to pay, because they can gain massive returns. Syndicates working with supplying contraband cigarettes have become more brazen and wanting to exhaust all avenues, including leveraging threats, to influence these quarters to do business with them.
Weak System Has Embolden The Traders
The smuggling dilemma is deteriorating caused by weaknesses around the system. Penalties are light, you can find poor border controls, very few arrests are created, and the high tobacco taxes establish a big price disparity with neighbouring countries, defining it as highly lucrative. This challenge are only allowed to be tackled by stopping corruption and reducing the leading drivers, namely the crime syndicates.
There should be harsher penalties and punishment against all parties involved within the illicit cigarette organization. Imposing heavier fines and in some cases imprisonment is definitely an effective deterrent to smugglers, distributors and sellers alike.