The tobacco tax burden as a percentage of retail price in Brunei Darussalam is 62%. Although this is high relative to other ASEAN countries, tobacco tax increases have not been implemented regularly since 2017, taking into account both price elasticity and income elasticity of demand, as well as inflation and changes in household income, to make tobacco products less affordable over time.
Brunei Darussalam imposes specific excise taxes on tobacco products (Table 1). No other taxes are imposed on tobacco products.
|Prior to 1 Nov 2010||After 1 Nov 2010||After 1 April 2017|
|Cigarettes||BND60/kg (about |
|BND 0.25/stick||BND 0.50/stick|
|Manufactured tobacco, |
|BND 30/kg||BND 60/kg||$120/kg|
|Beedies||BND 60/kg||BND 120/kg||$240/kg|
|Cigars, cheroots, |
|BND 100/kg||BND 100/kg||$400/kg|
|Others||BND 60/kg||BND 120/kg||$240/kg|
|Concession for travelers||Allowed (200 sticks only)||Prohibited||Prohibited|
In 2010, the government increased tobacco taxes to protect public health and curb the increasing government expenditure for treating tobacco-related diseases; however, there are no long-term policies on tobacco taxation, including monitoring of tobacco tax structures and targets against public health and fiscal objectives. The goal of tax increase in Brunei Darussalam is intended to reduce tobacco consumption. The last tobacco tax increase was in April 2017 from BND$ 0.25 per stick to BND$ 0.50 per stick).
All cigarettes are taxed similarly (BND 0.50 per stick) while excise tax rate of 100%
(ad valorem) are also applied to vape, vape juice and smoking pipe. Nonetheless, other tobacco products are taxed differently in Brunei Darussalam. Hence, it increases the risk of consumers from shifting their preference from expensive to cheap products in the same category. In addition, the tobacco tax burden on all types of products has not been regularly reviewed by responsible authority.
In Brunei Darussalam, licenses are required for retailing of tobacco products, transporting commercial quantities of tobacco products or manufacturing equipment, and the import, export, wholesaling, brokering, warehousing, and distribution of tobacco and tobacco products or manufacturing equipment. There are no tobacco growers or producers in Brunei.
All tobacco products being imported, Brunei Darussalam implements measures on storage warehouses to facilitate excise control on the tobacco products. Excise duties are imposed at the point of importation, and legal action will be taken under Excise Order 2006 against those who do not declare possession of such dutiable commodities. In addition to a license to import, a tobacco importer is also required to apply for a license for the tobacco storage warehouse, which is under the control of the Royal Customs and Excise Department, whereby the tobacco importer is required to report sales volumes and taxes due and paid.
There is no law or regulation to control the release of excessive volumes of tobacco products immediately prior to a tax increase, or to levy the new tax rates on products that are already produced and kept in stock but not yet supplied to the final consumer, including those in retail.
The government does not require any type of fiscal marking to be applied on tobacco products.
The Royal Customs and Excise Department of the Ministry of Finance is responsible for the enforcement of Excise Order 2006, and appropriate legal actions are imposed upon any violations under this Order.
As an exemplar of international best practice, the sale of tax-free or duty-free tobacco products is prohibited in Brunei Darussalam.
In line with WHO FCTC Article 5.3 the government does not consult or have binding agreements with tobacco companies or their front groups in the development and implementation of tobacco tax policy. In addition, there is no promotion of the industry’s Codentify system as fiscal marking and/or track and trace system in the country.