Tak Nak Part 1

In line with our beloved PM’s vision of having a “smoke free” nation , but how serious is the government in realising this vision?
RM20 billion to treat tobacco-related diseases each year
written by Claudia Theophilus of Malaysiakini
Malaysia spends a staggering average of RM20 billion each year, almost tenfold the tax revenue collected from the tobacco industry, to treat tobacco-related diseases, a local anti-tobacco advocacy group said.
Malaysian Council for Tobacco Control (MCTC) president Prof Dr Syed Mohamed Al Junid said about RM4 billion alone is spent to treat lung cancer,heart disease and chronic obstructive airway disease, all classified as tobacco-related illnesses.
“The tobacco industry in Malaysia is only worth between RM1.9 billion and RM2.5 billion a year in taxes but there is reluctance to conduct full and effective enforcement,” he said when interviewed recently.”
“The reality of the government’s stand is in blatant disregard of established facts and figures provided by national and international medical and health organisations.”
Acknowledging that the main dilemma hinges on economic considerations, he said the government appears to be supporting the industry because it regurgitates excuses commonly used by tobacco companies to stop or delay any cigarette tax hike.
“The revenue gap is too wide and statistics show that the healthcare cost outstrips any economic gain from tobacco or corporate taxes.”
Citing an industry favourite about the further impoverishment of tobacco farmers if cigarette taxes are increased, Syed Mohamed said appropriate data would reveal the fallacy therein.
Recently, he said, a tobacco company used this argument to delay a tax hike on kiddy-packs (packs of 10s).
“The Health Ministry acquiesced, citing the same excuses.”
According to him, there are about 20,000 tobacco farmers in the country, contributing part of the industry’s needs. The rest are imported.
“The government’s excuse based on the tobacco industry’s story is far-fetched. To me, the relationship between a tax increase and its impact on tobacco farmers is very distant. It’s not a strong argument,” he said.
“You tell me, what have farmers got to do with kiddy-packs? Moreover, the government is attempting to diversify the tobacco farmers’ activity into cultivating kenaf plants instead.”
(Kenaf is a fiber crop that is increasingly being sought by the bedding,padding and paper pulp industries.)
Syed Mohamed said the government continued to entertain the tobacco industry due to established business links and practices.
“The tobacco companies here are well-established, well-linked. In fact,some government entities hold blue-chip stocks belonging to local tobacco giant British American Tobacco (Malaysia) Bhd (BAT), hence the reluctance for strict enforcement.”
The Employees Provident Fund holds a 6.57 percent stake in BAT, a main board-listed company.
“This is only a short-term gain. There is a clear-cut case for the government to seriously cut down on tobacco and related products,” he added.
In an announcement of its first-quarter performance on April 27, BAT declared a lower pre-tax profit compared to the corresponding period last year despite a higher turnover of about RM894 million. Last year’s Q1 turnover was RM753 million.
BAT recorded a pre-tax profit of about RM235 million, down from RM277million previously.
It attributed the slight dip to “cost of debranding activities driven by regulation compliance and the price reduction of the value for money brands”.
The company which manufactures, imports and sells cigarettes, pipe tobaccos and cigars said it’s first-quarter drop in domestic volumes was due to “significant excise-led price increase” last year.
Last year BAT, which holds approximately 64 percent of the market share, posted a RM3.3 billion turnover with a after-tax profit of 1.1 billion.
Syed Mohamed, a health economics professor who consults on public health medicine at Universiti Kebangsaan Malaysia, believes that the tobacco industry’s multi-billion ringgit average annual turnover helps to maintain a strong grip on the government’s economic sense.
“The current tax imposed on the retail price of cigarette is between 45 and 50 percent. It must be at least 65 percent in order to make smoking a very expensive habit.
“Furthermore, the tobacco industry has shifted its focus on emerging markets in developing countries especially in Asia due to the intense anti-tobacco lobby in the West,” he explained.
“In the post-1990s period, developed countries forced the industry to shift their focus to developing countries such as China, Indonesia, Thailand and Malaysia partly because these countries had weak regulatory framework.”
On the other hand, he said Singapore had very strong control over the media industry which, together with enforcement and health promotion, has achieved success in its tobacco-control efforts.
The MCTC has 28 organisations comprising professional bodies such as the Malaysian Environmental Health Association, non-governmental organisations and research institutes from public universities.
This article was originally published in Malaysiakini on 16 June 2005

6 thoughts on “Tak Nak Part 1”

  1. Darren: I thought the article mentioned, if you keep smoking, you’re ruining the economy because of the healthcare costs. Did you read the article?
    “The revenue gap is too wide and statistics show that the healthcare cost outstrips any economic gain from tobacco or corporate taxes.”
    Oh yeah, smoking causes brain damage.. 😉

  2. THey even hav a song for tis…tak nak merokok hoi hoi..in TV..funny…frm wat ive noticed..most of the Tak Nak billboards were torn down outside most schs…

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