Gamblers contribute RM4.5b to sin tax

The govt also collects RM4.4b from tobacco products and RM3.6b from alcohol sales


THE federal government has collected RM12.5 billion from sin taxes — with gamblers contributing RM4.5 billion from the figure — between May 2018 and September this year.

Finance Minister Lim Guan Eng said in a written parliamentary reply that the sin tax — imposed on tobacco, alcohol and gambling — was also collected from tobacco products worth RM4.4 billion and RM3.6 billion from alcohol sales.

In 2017, RM3.94 billion in sin tax was collected from cigarettes and tobacco products, compared to RM1.92 billion from alcoholic beverages, totalling about RM5.9 billion.

According to the Galen Centre for Health and Social Policy, an average of RM5.1 billion in sin tax was collected from tobacco and alcohol products between 2012 and 2017. Annual collection also increased by a total of RM1.165 billion during the same period.

Between 2016 and 2017 alone, the collection saw an increase of almost 10% (RM523 million).

Currently, sin tax revenue from cigarettes, tobacco products and alcohol — which comprised almost half, or 49.7% of all excise duties collected in 2017 — is consolidated with other government revenue.

Sin taxes are often targeted in every budget as it is viewed to be the easiest way of obtaining additional revenue for the country.

Revenue from excise duty imposed on cigarettes, tobacco products and alcohol imported, manufactured and sold in Malaysia have increased steadily over the past half decade.

However, there has been no move yet to earmark the revenue collected for the purpose of health, specifically and directly funding non-communicable disease prevention, control and treatment.

There is no introduction of new tax measures or duties for the sin sectors in Budget 2020.

In the previous budget, the government had increased casino duties to 35% on gross gaming income and gaming machine duties to 30% on gross collection.

Under the Sales and Service Tax regime, alcohol is taxed at 10%, compared to only 6% under the Goods and Services Tax system.

Think tanks have argued that any move to stub out tobacco use with higher levies has pushed smokers to the black market instead.

Malaysia has the world’s highest share of illegal tobacco sales at 59% of its market, with 1,000 illicit cigarettes bought each minute, Oxford Economics said in a report commissioned by British American Tobacco plc.

That has cost the government RM13.5 billion of revenue in unpaid taxes since Malaysia raised excise duties on cigarettes in 2015.