Malaysia loses US$775m a year to illicit tobacco trade as market share hits 55pc, study finds

A recent study by The Center for Market Education (CME) highlights that Malaysia is losing approximately US$775 million annually in tax revenue due to illicit tobacco, which accounts for 55% of the market.

This is amongst the highest in the Asia-Pacific region, alongside Pakistan and Australia.

The study emphasizes that high tobacco taxes do not necessarily lead to increased government revenue if a significant portion of consumption shifts to the illicit market.

CME recommends a comprehensive approach combining gradual tax adjustments, strengthened enforcement, and regional cooperation to address the issue.

KUALA LUMPUR, Sept 16 — Malaysia is estimated to be losing around US$775 million (RM3.2 billion) in tax revenue annually to illicit tobacco, with illegal products accounting for more than half of the market, according to a new regional study.

In a media release, The Center for Market Education (CME) estimated Malaysia’s illicit tobacco market share at 55 per cent, making it one of the most severe cases among 14 Asia-Pacific economies examined in its latest policy paper.

Pakistan recorded a similarly high illicit share of 54 per cent, while Australia was estimated at 60 per cent.

According to CME, the estimated revenue lost to illicit tobacco in both Malaysia and Pakistan now exceeds the amount governments collect from tobacco taxation, suggesting significant erosion of the legal tax base.

The findings form part of CME’s Illicit Tobacco Trade in Asia-Pacific: Taxation, Market Incentives, and Macroeconomic Costs, released today.

Across countries for which comparable estimates could be calculated, the study estimated governments collect around US$30.98 billion in tobacco taxes while losing another US$14.85 billion to illicit trade.

That translates to nearly US$48 in estimated revenue lost for every US$100 collected in tobacco taxes.

The study estimated the losses were equivalent to around 1.63 per cent of total tax revenue, 4.27 per cent of current health expenditure and 7.71 per cent of government education expenditure across the sample.

Australia recorded the largest estimated revenue loss at US$9.60 billion, followed by Indonesia at US$1.65 billion.

Pakistan was estimated to lose around US$999 million, while Malaysia’s loss stood at US$775 million and Thailand’s at US$567 million.

Indonesia, despite having an estimated illicit-market share of just 10.77 per cent, recorded the second-highest monetary loss — something CME attributed to the sheer size of its tobacco market.

The paper argues that illicit tobacco should be viewed not only as a customs or law-enforcement issue, but also as a fiscal and tax-policy challenge.

It cautioned against assuming that higher tobacco excise rates would automatically translate into greater government revenue, arguing that taxation is effective only when enough consumption remains within the legal and taxable market.

CME chief executive officer and study author Dr Carmelo Ferlito said policymakers should look beyond statutory tax rates to how much revenue governments actually manage to collect.

“The relevant question is not simply how heavily tobacco is taxed, but how much of that tax can actually be collected,” he said in a statement.

“When taxation pushes an increasing share of consumers outside the legal market, governments risk undermining their own fiscal objectives.”

The paper recommends gradual and predictable excise changes alongside assessments of a country’s enforcement capacity.

For markets already experiencing high illicit penetration, CME suggested temporary tax freezes or more moderate adjustments while efforts are made to stabilise the legal market.

It also called for closer cooperation between tax authorities, customs, police, border agencies and regulators, stronger enforcement against illegal production and distribution networks and independently verifiable monitoring of illicit tobacco penetration.

Regional cooperation should also be strengthened to tackle cross-border illicit supply chains, it said.

Ferlito said tax increases should be evidence-based and compatible with enforcement capacity, arguing that policymakers should consider actual revenue collected, legal-market volumes and illicit-market penetration when assessing tobacco policy.

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市场教育中心 (CME) 最近的一项研究强调，由于非法烟草占市场份额的 55%，马来西亚每年损失约 7.75 亿美元的税收。

这是亚太地区最高的国家之一，与巴基斯坦和澳大利亚并列。

该研究强调，如果相当一部分烟草消费转移到非法市场，那么高额烟草税不一定会增加政府收入。

芝加哥商品交易所建议采取综合措施来解决该问题，包括逐步调整税收、加强执法和区域合作。

吉隆坡，9 月 16 日——一项新的区域研究显示，马来西亚每年因非法烟草损失约 7.75 亿美元（32 亿令吉）的税收，非法烟草产品占市场份额的一半以上。

市场教育中心 (CME) 在一份媒体声明中估计，马来西亚的非法烟草市场份额为 55%，这使其成为该中心最新政策文件中研究的 14 个亚太经济体中最严重的案例之一。

巴基斯坦的非法消费比例也高达 54%，而澳大利亚的非法消费比例估计为 60%。

据芝加哥商品交易所 (CME) 称，马来西亚和巴基斯坦因非法烟草造成的收入损失估计已超过政府从烟草税收中获得的金额，这表明合法税基受到了严重侵蚀。

这些研究结果是芝加哥商品交易所 (CME) 今天发布的《亚太地区非法烟草贸易：税收、市场激励和宏观经济成本》报告的一部分。

该研究估计，在可以进行可比估算的国家中，各国政府征收的烟草税约为 309.8 亿美元，但因非法贸易损失的金额却高达 148.5 亿美元。

这意味着每征收 100 美元的烟草税，就会损失近 48 美元的收入。

该研究估计，这些损失相当于样本中总税收收入的约 1.63%、当前医疗支出的 4.27% 和政府教育支出的 7.71%。

澳大利亚估计收入损失最大，达 96 亿美元，其次是印度尼西亚，损失达 16.5 亿美元。

据估计，巴基斯坦损失约 9.99 亿美元，马来西亚损失 7.75 亿美元，泰国损失 5.67 亿美元。

尽管印尼的非法市场份额估计仅为 10.77%，但其货币损失却位居第二——芝加哥商品交易所 (CME) 将此归因于其烟草市场的巨大规模。

该论文认为，非法烟草不仅应该被视为海关或执法问题，还应该被视为财政和税收政策挑战。

它告诫人们不要想当然地认为提高烟草消费税率会自动转化为更多的政府收入，并认为只有当合法且可征税的市场内仍有足够的消费时，税收才是有效的。

CME首席执行官兼该研究报告作者卡梅洛·费利托博士表示，政策制定者应该关注的不仅仅是法定税率，而是政府实际征收的税收收入。

他在一份声明中表示：“相关的问题不仅仅是烟草税有多高，而是实际能征收多少税款。”

“当税收将越来越多的消费者推离合法市场时，政府就有可能损害自身的财政目标。”

该文件建议逐步且可预测地改变消费税制度，同时评估一个国家的执法能力。

对于非法渗透率已经很高的市场，芝加哥商品交易所建议暂时冻结税收或进行更温和的调整，同时努力稳定合法市场。

报告还呼吁税务机关、海关、警察、边境机构和监管机构之间加强合作，加大对非法生产和分销网络的执法力度，并对非法烟草渗透情况进行独立可核实的监测。

报告还指出，应加强区域合作，打击跨境非法供应链。

费利托表示，增税应该以证据为基础，并与执法能力相符。他认为，政策制定者在评估烟草政策时，应该考虑实际征收的收入、合法市场的交易量以及非法市场的渗透率。

亚伦说，国家利益必须超越种族和宗教差异。

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