Govt estimates RM5 billion losses from cigarette, alcohol smuggling

The government is estimated to have lost billions in excise duty, sales tax and import duty due to the smuggling of tobacco products, cigarettes and alcoholic beverages, Deputy Finance Minister Steven Sim told the Dewan Rakyat today. 

He said the losses were based on the confiscation of goods worth RM350 million in 2021 and RM364 million in 2022. 

Going by industry calculations and estimates, he added, the value of the losses borne by the government would be far greater. 

"These might reach RM5 billion each year," he said when responding to an oral question by Wan Saiful Wan Jan (PN-Tasek Gelugor).

Sim said the government would continue its efforts to combat the smuggling of cigarettes and alcohol to curb the leakage of tax revenue. 

He said the customs department would also focus on the criminal syndicates involved through patrols, the implementation of enforcement activities, inspections and roadblocks, among others. 

He added that the department had acted against those involved in such activities and imposed higher penalties since 2020. 

"The customs department is also working with enforcement and security agencies as well as industry players, and carrying out intelligence activities and international operations," he said. 

Sim also said that there had been an increase in the collection of cigarettes and tobacco from RM3.27 billion in 2020 to RM3.47 billion in 2021.

Meanwhile, industry studies show a decrease in contraband cigarette activities in Malaysia from 63.8% in 2020 to 57.3% in 2021 and 56.6 in 2022.