‘Illicit trade has flourished during MCO period’
KUALA LUMPUR: Technology advancement not only makes trade easier but also enables illicit trade to be conducted at the fingertips.
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 comprised about 25 per cent of the total trade last year, and according to Japan Tobacco International (JTI), the loss in tax revenue annually for the tobacco industry is estimated at
RM5 billion.
This has caused the government to lose tax revenues, especially from items listed under the sin tax such as tobacco and alcohol, amounting to almost RM10 billion per year.
In an email to Bernama, JTI said that illicit trading had grown exponentially during the Movement Control Order 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 ecommerce and social media platforms, couriers and even food delivery riders to move illicit cigarettes in open defiance of the law,” it said.
This scenario is experienced not only in Malaysia but also globally.
According to United Nations Conference on Trade and Development, annually about US$2.3 trillion is drained from the global economy due to illicit trade.
What is worse, such activities grow at a fast pace while countries across the globe are struggling to tackle Covid-19.
Interpol director of organised and emerging crime, Paul Stanfield, said law enforcement played an important role in tackling illicit trade, as the huge lost in tax revenue would put a dent to national coffers.
“Without a strong law enforcement, such type of trade is expected to continue growing and it would hurt the economy further in coming times,” he said in a webinar session organised by The Economist yesterday.