Malaysia’s government efforts to eliminate smoking by increasing excise taxes on cigarettes failed. Instead of reduce their habits, smokers looked to illegal cigarettes and produced a boom. We are now our planet’s largest consumers of illegal cigarettes, buying 1,000 packs a minute.
An investigation by Oxford Economics on tobacco discovered that the illegal cigarette trade cost Malaysia almost RM4.8 billion in excise duties the year before. Another study said Malaysia is considered the largest consumer of illegal cigarettes on the earth, with over 12 billion sticks sold the year before. Oxford Economics estimated that 58.9 percentage among all cigarettes offered in Malaysia were illegal.
Government Effort Makes Little Impact
To deal with the millions of lost revenue, police officers agencies conducted many raids to foil smuggling attempts at border checkpoints. Currently, the Customs Department repossesed illegal cigarettes with revenues worth RM1 billion. These illegal operations are clearly our planet’s biggest successful syndicate.
Government raids are just scratching the top of the problem. A much more concerted effort is necessary to combat the illicit tobacco trade. Oxford Economics warned that smuggling syndicates can undermine the rule of law in the country and flout regulations through bribery. This will likely worsen the thought of corruption and get a new country’s attract global investors.
Corrupted Law Enforcement
Bribery is relatively cheap way for smugglers to obtain past with border controls, when compared to the huge returns they create. However, when bribery fails, these criminal syndicates are bold enough to work with threats and intimidation against border officers to acquire their cooperation.
This concern will not be unfounded, as a whopping 80 per cent of police officers and security personnel at Malaysian borders are reportedly corrupt. The ever rising sale of illegal cigarettes generates huge profits which are often channeled into more smuggling and other varieties of criminal activities. Cigarette smuggliing will worsen attributable to poor border controls and low arrest rates, as a consequence of corruption.
Lucrative Source Of Income Finances Terrorism
Illegal cigarettes trade is another lucrative business and the like cash is utilized to finance terrorism . The Home Ministry and crime prevention groups started drawing links to terrorist organisations and the booming illegal cigarette business, because it is believed these organisations are applying Malaysia in the form of base to invest in their activities.
Weak Punishment For Offenders
Weak penalties for offenders also embolden them. Malaysia’s high tobacco taxes establish a huge disparity of prices with neighbouring countries, that creates smuggling lucrative. To curb this challenge, corruption has to be stopped within the source, exactly what the syndicates.
The federal government should introduce harsher punishment greater penalties across the supply chain, including heavier fines and imprisonment. It could be an increasingly effective deterrent if most of the players, coming from the smugglers to individual operators like distributors and retailers, are susceptible to the complete force belonging to the law.