BUDGET 2021 MUST STOP THE LEAKAGE TO GROW ECONOMY - RTBA MALAYSIA

KUALA LUMPUR, Sept 29 -- Malaysia can no longer afford to turn a blind eye to revenue losses caused by a RM300 billion shadow economy when the national economic outlook remains bleak, said Retail and Trade Brands Advocacy Malaysia Chapter (RTBA Malaysia).

In view of protecting businesses, jobs and livelihoods, RTBA Malaysia is putting forward a four-point proposal to the government to curtail the tobacco black market trade, which costs the nation RM5 billion annually in uncollected revenue and forms a significant portion of the RM300 billion shadow economy.

The four-point proposal includes increasing funding to the relevant enforcement agencies to recruit more personnel, conduct advanced training and provide better equipment to enhance performances and safety, and to review price mechanisms and excise structures that would address the large price differential between legitimate and illegal products, thus removing the motivation of black market perpetrators.

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“This also includes establishing funding for a multi-agency and multinational task force to combat the tobacco black market trade, which is a problem that has spread to other neighbouring countries; and create an anti-black market fund to encourage whistle-blowers.

“This fund can also be used to upgrade the reporting process to improve response time and quality of action,” RTBA said in a statement today.

Managing director Datuk Fazli Nordin said the tobacco black market has a negative multiplier effect on the nation’s economy as it also funds crime, fuels corruption and undermines the nation’s health agenda.

Unfortunately, he said the situation is expected to worsen.

He cited a report released by Japan Tobacco International recently, stating that the COVID-19 pandemic has created conditions where organised criminal groups will further exploit the demand for cheap goods and capitalise on dwindling buying power, particularly in countries with high tax regimes.

“The problem is big and deep-rooted, as such, the solution cannot be a step-by-step measure.

“It has to be comprehensive and multipronged, curtailing the tobacco black market from demand as well as (from a) supply standpoint,” he added.

-- BERNAMA