KUALA LUMPUR: British American Tobacco Malaysia (BAT) is shocked over the 14 per cent increase of tobacco excise, describing it as “excessive”.
“Such a move will exacerbate the already high levels of illegal cigarettes in Malaysia,” said managing director Stefano Clini.
He said the announcement was “shocking and disappointing”, adding the industry would have welcomed a more moderate and gradual approach as it was not opposed to excise increases.
BAT had since announced an increase on the prices of all its cigarette brands effective today.
“We have been operating at optimal cost efficiency and increased our export volumes by expanding contract manufacturing over recent years to sustain returns to investors.”
Clini said despite the measures taken, the company would be hard pressed to counteract its loss of returns due to volumes lost to illegal cigarettes.
“This drastic excise increase will further compound our losses, leaving us with no choice but to take a significant price increase.”
BAT said it would have been better if the government gave priority to tackling the illegal cigarette trade rather than increasing taxes drastically.
“There is about RM2 billlion in revenue that is lost to illegal cigarettes.
“Hopefully, the government will enhance the enforcement efforts and consider deploying more deterrent laws, such as mandatory imprisonment for dealing in illegal cigarettes, to curb the growth of this national scourge.”