A PACK of premium-brand of cigarettes in Malaysia costs only RM8.20. However, the price of a premium brand in the United Kingdom is RM36.60 and in Singapore RM27.80. In comparison to some countries in Europe and the Asia-Pacific, the price of cigarettes is comparatively very low in Malaysia (see fact box).

At present, tobacco is among the leading causes of death in Malaysia (smoking accounts for 25 per cent of all deaths). Additionally, the economic costs of tobacco are equally devastating.

In Malaysia, a study estimated that the annual health cost of three smoking-related diseases is equivalent to 0.43 per cent to 1.31 per cent of the gross domestic product and that tobacco-related diseases accounted for 16.49 per cent (about RM2.9 billion) of the country’s total healthcare budget.

According to the Framework Convention on Tobacco Control, raising tobacco prices through tax increase, ideally above 65 per cent of retail price, “is an effective and important means of reducing tobacco consumption by various segments of the population, in particular, young persons”.

The World Health Organisation has recommended that the tax of a specific amount levied on a given quantity of tobacco is most effective.

In the report by Southeast Asia Tobacco Control Alliance, it is estimated that for every 10 per cent increase in cigarette prices, overall cigarette consumption will decline by eight per cent. Furthermore, the World Bank estimates that this increase in taxes will result in about a seven per cent increase in revenue for the government.

The Consumers Association of Penang recommends that the Malaysian government increase the optimum level of taxation of tobacco from 36 per cent to between 66 per cent and 80 per cent. Some of the countries that have already imposed these levels are France, Thailand, Denmark and the United Kingdom. In these countries, tax accounts for two-thirds to four-fifths of the retail price of cigarettes.

The Malaysian government can utilise the revenue from the tobacco tax to fund anti-tobacco initiatives and improve the healthcare system.

We hope that our recommendation will be taken seriously in the upcoming budget presentation so that the smoking epidemic can be effectively arrested.

S.M. MOHAMED IDRIS for Consumers Association of Penang

Source: NST – August 6, 2008