The overall progress of tobacco tax policy implementation:
- Relationship between tobacco taxes, price and public health
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.
Table 1: Tobacco tax system in Brunei Darussalam
|Prior to 1 Nov 2010||After 1 Nov 2010||After 1 April 2017|
|Cigarettes||BND60/kg (about BND 0.03/stick)||BND 0.25/stick||BND 0.50/stick|
|Manufactured tobacco, tobacco refuse||BND 30/kg||BND 60/kg||$120/kg|
|Beedies||BND 60/kg||BND 120/kg||$240/kg|
|Cigars, cheroots, cigarillos||BND 100/kg||BND 200/kg||$400/kg|
|Others||BND 60/kg||BND 120/kg||$240/kg|
|Concession for travelers||Allowed (200 sticks only)||Prohibited||Prohibited|
- Level of tax rates to apply
In 2010, the government increased tobacco taxes to protect public health and curb the increasing government expenditure for treating tobacco-related diseases; however, there are no long-term policies on tobacco taxation, including monitoring of tobacco tax structures and targets against public health and fiscal objectives. The goal of tax increase in Brunei Darussalam is intended to reduce tobacco consumption. The last tobacco tax increase was in April 2017 from BND$ 0.25 per stick to BND$ 0.50 per stick).
- Comprehensiveness/similar tax burden for different tobacco products
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.
- Warehouse system/movement of excisable goods and tax payments
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.
- Anti-forestalling measures
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.
- Fiscal markings
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.
- Use of revenues – financing of tobacco control
The government provides an annually specified budget for its tobacco control program, however it is insufficient to implement a long-term tobacco control strategy. The tobacco control program budget in 2018-2019 i at the Health Promotion Center’s was BND 180,000. Tobacco tax revenues are not dedicated to the tobacco control program. Currently, there is no plan to change or increase budget for tobacco control activities.
- Tax-free/Duty-free sales
As an exemplar of international best practice, the sale of tax-free or duty-free tobacco products is prohibited in Brunei Darussalam.
- Protection of tax policies from vested interests
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.
Southeast Asia Tobacco Control Alliance. (2021). SEATCA Tobacco Tax Index:
Implementation of WHO Framework Convention on Tobacco Control Article 6 in ASEAN Countries, 2021. Bangkok, Thailand.