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Tobacco and alcohol companies happy with status quo

Saturday September 29, 2012
Tobacco and alcohol companies happy with status quo

THE Government did not raise sin taxes, as expected, and those in the tobacco, alcohol and cigarette companies can continue to breathe a big sigh of relief.

There was also no rise in sin taxes last year, but any rise, according to the players, creates a negative impact on their sales and any rise in sin taxes pushes consumers to resort to contraband products.

JT International Berhad welcomed the Government’s decision not to increase the current cigarette excise rates in Budget 2013.

“Excessive taxation impacting retail prices has always been a key factor in driving consumers to purchase illegal cigarettes, and we are glad that it has been avoided in this budget.

“A lot of work still needs to be done between law enforcement agencies and the industry, and now – more than ever – there is an opportunity to truly reduce the illegal trade of cigarettes,’’ said JTI Malaysia managing director Shigeyuki Nakano.

He added that JTI Malaysia would work with the Government to reduce illegal cigarettes trading in Malaysia as there “was a need to create greater awareness amongst retailers and smokers that selling and buying illegal cigarettes is a serious offence under Malaysian law.’’

According to a recent study commissioned by the Confederation of Malaysian Tobacco Manufacturers (CMTM), the illicit trade remains high at 34.7%. Carlsberg Brewery Malaysia Berhad managing director Soren Ravn thanked the Government for maintaining beer excise duties in Budget 2013.

He said the pragmatic decision was also consistent with the government’s Economic Transformation Programme objectives, the National Key Economic Areas and the Entry Point Projects focusing on growing the tourism sector significantly.

“Carlsberg Malaysia will continue to invest in the Malaysian economy, supporting local tourism industry and SMEs to support the government in achieving its objectives to transform Malaysia into a high income nation by 2020.

“We are also committed in our CSR projects for the betterment of the local communities,” added Soren Ravn.

Sin tax normally refers to the tax imposed on the tobacco and alcohol and industries and excessive taxation is one of the main reasons for the smuggling of cigarettes which in effect does not benefit the Government as it reduces the additional revenue opportunities for the Government.

Industry players had often said that Malaysia’s taxes were already high versus other countries.

Alliance Research Sdn Bhd vice president of equity research Cheah King Yoong said there was an absence of gaming taxes, bringing cheer to the Genting group and numbers forecasting operators (NFOs).


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