KUALA LUMPUR,. The government cannot afford to hike the prices of cigarettes through taxes, Dzulkefly Ahmad told Dewan Rakyat today despite the health dangers smoking causes.
He said the move would drive Malaysia’s bottom 40 per cent of income earners, the B40 group, to turn to the black market for cheaper smokes, citing studies by the Finance Ministry that have shown that illicit cigarette consumption is now at 60 per cent.
He added that in the long run, raising the prices of legitimate cigarettes would cost the government more in terms of revenue loss and treating smoking-related illnesses.
“If we raise the cigarette prices until it is not affordable to the B40 group, then they will turn to the cheaper illicit cigarettes that will expose them to a series of non-communicable diseases (NDC): chronic pulmonary disease, chronic cardiovascular disease, lung cancer.
“So we need to calculate the cost benefit analysis against the spread of illicit cigarettes,” he said in reply to Pakatan Harapan backbencher and Subang MP Wong Chen who wanted to know if the government will adhere to World Health Organisation recommendation of 75 per cent taxation per stick.
Dzulkefly said that currently the cost to treat the three top NDC related to smoking is RM2.29 billion, adding that the government subsidises 67.5 per cent of the treatment cost with 32.5 per cent paid by the patient.
The treatment cost is 0.7 per cent of the nation’s GDP, he said.
A 2017 Health Ministry study on tobacco control have shown that if Malaysia does not take a more firm stance regarding cigarette control it will cost the government RM7.04 billion by 2025.