APRIL 7 — Recently I wrote a letter to the press detailing how the government needs to splurge on enforcement in order to make back the money they wish to spend.
One such area that really needs enforcement is stopping the sales bootleg cigarettes, which is to be done by the Customs Department.
Yes, yes, cigarettes are bad for you and you shouldn’t be smoking at all, but I’m not discussing the health aspect here.
I would like to point out the revenue aspect, primarily the loss of revenue to government.
According to The Star in 2012, the government got RM3.28 bil into its coffers through the sales of cigarettes. However, the amount lost by the government due to illegal sales of cigarettes (34.5 per cent of local consumption) amounts to RM1.918 bil in tax losses, RM1.81 bil loss in excise duty revenue and RM108 mil in loss of sales tax revenue.
Without leakages, this would mean that this government would have made some RM7 bil in 2012.
Unfortunately, the losses to government amounts close to RM4 billion a year due to leakages then, one can only wonder how much it accumulates annually to now.
Let us compare this to yet another source of revenue from Customs - the Goods and Services Tax or GST.
According to the Prime Minister in his 2015 budget speech last year, the government targets to make RM5.6 billion annually through this newly introduced tax.
But if this government had actually splurged on Customs to stop the sale of bootleg cigarettes, it would still make higher income compared to the GST a on an annual basis by roughly RM1.4 bil.
Heck, if the government and Customs had acted sooner in 2012 and stopped the leakages, we could have funded the entire PDRM budget of RM9 bil with RM3 bil to spare!
And Customs would not have had to waste cash on that stupid YouTube sing-along video.
This is but one example of government not getting its priorities in order.
It needs to consider the amount that is leaking out through something as simple as cigarettes is in the billions, and even makes more money than the introduction of a new tax system.
Yes, there are harsh penalties in place already for those who buy and sell bootleg cigarettes, but unfortunately as of March 2015, the news has only highlighted Customs claiming victory through the arrest of three people.
And I seriously doubt three people consume a third of the cigarettes in this country, which are illegal.
The government must provide Customs with adequate resources to combat something with zero tolerance, especially since we are talking about losing RM4 bil a year and rising if you take into account GST and the increasing number of smokers daily.
So will this government and its Customs Department see at least some reasoning to start enforcing their anti bootleg tobacco programme?
One can only hope so. After all, this government insists on being strapped on cash should be just the kick it needs to take this issue seriously.
* This is the personal opinion of the writer or organisation and does not necessarily represent the views of Malay Mail Online.
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