On Tuesday night, 3 November, following Putrajaya's increase of the excise tax for more than 40% on tobacco products, the prices of cigarettes under the British American Tobacco Malaysia (BAT Malaysia) brand have gone up effective Wednesday, 4 November
A "shocked" BAT Malaysia said that the increase in excise was "unprecedented" and "massive", adding that the price hike (up by RM3.20) would only serve to boost the contraband market
“The legal tobacco market has declined by 10% on a September year-to-date basis. This extreme hike in cigarette excise done against the backdrop of both weakened economy and consumer sentiments will definitely fuel further an already high level of illegal cigarettes, where one in three packs is illegal.
We cannot imagine the impact that this more than 40% increase in excise will have on the industry” BAT Malaysia's managing director Stefano Clini said in a statement.
Stefano Clini, Managing Director BAT Malaysia, said the tobacco industry had already been hit by a huge 12% increase in cigarette excise just a year ago on 1 November 2014
"This was followed by the implementation of the goods and services tax (GST) at 6% beginning April 1 this year. Consequently, British American Tobacco had to increase its cigarette prices taking into consideration the sum mandated by the excise increase and its impact on GST and inflationary cost pressures."themalaysianinsider.com
The price hike is likely to prompt some users to move to e-cigarettes (or vape as they are commonly called), which largely remains unregulated for now without a taxing regime.
However, the Health Ministry is looking to crack down on them, too!
Keeping that in mind, here's a couple of vape stories: