RM138.8m worth of contraband cigarettes, liquor seized

pic by BERNAMA

THE Royal Malaysian Customs Department (JKDM) has seized illicit cigarettes and alcohol worth RM138.77 million in 2020 up until September this year which saved the government from losing RM988.83 million of unpaid taxes.

Deputy Finance Minister I Mohd Shahar Abdullah (picture) said the contrabands were seized from 2,842 cases last year which totalled to RM97.34 million, involving RM707.14 million of potential tax losses.

As for this year, the authorities had seized the same items worth RM41.43 million from 2,518 cases as at September, which involved taxes amounting to RM281.69 million.

“In its effort to curb the leakages of tax revenue due to the smuggling of cigarettes and liquor, the JKDM has intensified enforcement actions through various raids, ground patrols, roadblocks, ship inspections, as well as conducting various special operations to minimise the leakages,” he told the Dewan Rakyat yesterday.

Mohd Shahar was responding to a query from Teluk Intan MP Nga Kor Ming who requested data on the total losses faced by the government due to smuggling activities involving contraband cigarettes and liquor.

Nga had also asked the deputy minister about the government’s efforts to stop the entry of illicit cigarettes into the country, citing data that stated 62% of the world’s illicit cigarettes are sold in Malaysia.

Mohd Shahar said the government has established a Multi-Agency Task Force (MATF) which is formed by various enforcement agencies specifically to address the alarming issue.

Among other measures taken to curb the sales of illicit cigarettes include tightening of transhipment activities at Malaysian ports.

“We have limited cigarette transhipment activities to only five ports in Malaysia namely two in Port Klang which are the North and West Ports; Tanjung Pelepas Port, Johor; Senari Port in Sarawak and Sepanggar Port in Sabah.

“We also imposed a tax on imported cigarettes for re-export purposes before we give a tax refund, which is not 100% but only nine out of 10,” he said.

Nga had also highlighted the government’s move that requires coffee shops to apply for separate licenses to sell items such as cigarettes and alcoholic beverages.

Nga said the enforcement would put pressure on the operators which could lead to the increase in prices of items sold at these shops.

“Coffee shops need to apply for a license to sell cigarettes, and then a separate one to sell alcoholic drinks.

“The cost of one license is RM1,340 which means the operators will pass on the costs to consumers.

“How many licenses does a coffee shop need? Why does the government decide to add more bureaucracy and costs that will burden the people especially at a time when the people are struggling due to the price hike of goods,” he said.

In his response to Nga, Mohd Shahar said the increase in prices of tax with regards to alcoholic drinks is not only practiced in Malaysia but also other countries.