‘Illicit trade has flourished during MCO period’

KUALA LUMPUR: The advancement of technology may have made trade easier but it has also enabled illicit businesses to be conducted just as easily.

From medicine to cigarettes and alcohol, the market segment, which is also known as the black economy, has grown over the past years.

It is estimated that the black economy represented about 25% of total trade last year.

According to Japan Tobacco International (JTI), the loss in tax revenue per year for the tobacco industry is estimated at RM5 billion.

This has caused the government to lose tax revenues, especially from items listed under “sin tax” such as tobacco and alcohol, amounting to almost RM10 billion per year.

JTI said in an email that illicit trading had grown exponentially during the movement control order (MCO) period as syndicates resorted to creative online methods to ply their trade and reach end users in light of restricted physical movements.

“This includes the use of e-commerce and social media platforms, couriers and even food delivery riders to move illicit cigarettes,” it said. This scenario was the same across the globe.

According to the United Nations Conference on Trade and Development, illicit trade drains about US$2.3 trillion (RM9.8 trillion) from the global economy every year.

Interpol director of organised and emerging crime Paul Stanfield said law enforcement played an important role in tackling illicit trade.

“Without strong law enforcement, such trade is expected to continue growing and it would hurt the economy further in coming times,” he said in a webinar organised by The Economist. – Bernama