Malaysia Eyes Major Cigarette Price Hike

Over 80% Increase Proposed to Curb Smoking Rates

Health advocates are pushing for a significant jump in cigarette prices across Malaysia, aiming to deter smoking and boost public health. The proposal seeks to more than double the average retail cost of a pack.

Ambitious Tax Strategy Unveiled

A coalition of health organizations, including prominent institutions like Johns Hopkins and the American Cancer Society, has put forth a bold plan. They recommend increasing the average retail price of cigarettes from MYR 17.40 (approximately $4.11) to MYR 31.74 ($7.50) per pack. This substantial change would be achieved by implementing a 159% excise tax increase.

Targeting Reduced Smoking Prevalence

The primary objective of this significant price adjustment is to lower adult smoking prevalence. The current rate stands at approximately 18.2%, and the target is to bring this down to the national goal of 15%. This initiative aligns with broader public health strategies to combat tobacco use.

Boosting Revenue and Addressing Affordability

Beyond public health benefits, the proposed tax hike is projected to generate substantial revenue. Estimates suggest it could bring in roughly MYR 2.6 billion ($615 million) annually in tax income. The study highlights that cigarette affordability has stagnated since 2014, even with existing high tax levels, which already account for about 75% of the retail price. The research methodology is grounded in World Health Organization recommendations for systematic adjustments linked to economic indicators like GDP and inflation.

Global Trends in Tobacco Taxation

Malaysia’s proposed price increase mirrors a global trend of using taxation as a key tool to reduce tobacco consumption. For instance, Australia, which has one of the highest tobacco taxes globally, has seen significant drops in smoking rates. In 2022, the Australian government announced further tax increases, aiming to discourage smoking and fund health initiatives, with tobacco excise duty rising by 12.5% Australian Department of Health and Aged Care, 2023.

Call for Health-Focused Fiscal Policy

This push for higher tobacco taxes underscores a growing emphasis on fiscal policies that actively promote public health outcomes. The proposal’s creators believe that such measures are essential for achieving national health targets and creating a healthier environment for all citizens.