Use of fake tax stamps surges to 8.7 pct last year — JTI M’sia

Japan Tobacco International (JTI) Malaysia has revealed that the incidence of fake tax stamps surged to 8.7 per cent in last year’s market, according to the Illicit Cigarettes Study 2023.

Its general manager Juliana Mohd Yahya said that the efficacy of the current paper-based tax stamps should be reviewed by the government.

She emphasised that the government should consider alternative solutions, such as more secure and cost-effective digital tax codes, in line with their drive towards digitalisation.

“This incidence has shown a 0.8 percentage point increase last year compared to 2022. It has also increased threefold in a rising trend since 2016,” she told a press conference held at a hotel here yesterday.

Juliana further noted that, concerning United Kingdom tax costs, the current paper-based tax stamps cost around RM0.07 per stamp, while the digital tax codes would only cost around RM0.019 per stamp.

“As of now, there are few countries that have practised the digital tax codes, such as the United Kingdom, Jordan, and the EU.”

She also suggested the government enact regulations for vaping products under the Control of Smoking Products for Public Health Act 2024.

Such regulations, she added, are important to protect consumers of vaping products as well as facilitate excise tax collection from this category product, especially considering Malaysia’s ranking as the 12th largest e-vape market in the world. Juliana highlighted a decline in the incidence of illicit white cigarettes by 1.9 percentage points, from 41.4 per cent in 2022 to 39.5 per cent last year.

Despite this, she noted that the legal industry volume remains flat, partially due to consumers switching to vaping products.

“Although e-liquids containing nicotine have already been exempted from the Poisons Act 1952 since April 1, 2023, allowing them to be sold at retail outlets, vaping products have yet to be regulated,” she said.

She expressed concern over the regulatory gap that has enabled irresponsible operators to market vaping products resembling toys and containing dangerous ingredients prohibited in developed jurisdictions.

“E-vape regulations must be enforced because currently, there are no controls on products, ingredients, online sales, and marketing. I have personally witnessed situations where vape stores target children,” she remarked, emphasising the urgency of addressing the issue.

She cited the United Kingdom’s implementation of regulations on ingredients, nicotine volume, and nicotine strength as a model for Malaysia to consider.

Despite the challenges in enforcement, Juliana emphasised the necessity for regulation, considering the significant contribution of the vape industry to the economy.

“The government only has to evaluate the United Kingdom’s regulations and adjust it to the country’s suitability ... then we can adapt the regulation to our country,” she said.