A recent study conducted by Oxford Economics and commissioned by British American Tobacco (BAT) revealed that in 2018 about 60% of Malaysia’s cigarette market was made up of illegal products. This is a 56% jump from 2017 figures.
The Economics of the Illicit Tobacco Trade in Malaysia report released in June revealed also found that the level of illicit market penetration in Malaysia was the highest among the world’s top 100 tobacco markets.
According to the report, the Malaysian government imposed an excise hike in 2015, which led BAT Malaysia to raise cigarette prices in the country by almost 40%, yet Malaysia lost around MYR1.5 billion (US$360 million) due to taxes evaded by the illicit trade in 2018. A total of MYR13.5 billion in excise hikes has been lost to the illicit trade since 2015.