Ongoing enforcement measures include enhanced intelligence-sharing, upgraded surveillance systems: Ministry
PETALING JAYA: Malaysia has lost RM1.85 billion in tax revenue to cigarette and liquor smuggling over the past five years, the Finance Ministry revealed, underscoring the scale of the black market.
In a written parliamentary reply, the ministry said the Customs Department seized illicit cigarettes and alcohol worth hundreds of millions of ringgit between 2021 and this year with unpaid duties forming the bulk of the government’s losses.
The ministry said cigarette smuggling accounted for more than RM1.4 billion in unpaid taxes while liquor smuggling contributed over RM420 million in the same period.
According to the ministry’s data, unpaid duties recorded by the department amounted to:
- 2021: RM268.27 million (cigarettes), RM84.69 million (liquor);
- 2022: RM247.71 million (cigarettes), RM115.67 million (liquor);
- 2023: RM187.16 million (cigarettes), RM46.33 million (liquor);
- 2024: RM399.59 million (cigarettes), RM99.71 million (liquor); and
- January–September 2025: RM322.04 million (cigarettes) and RM78.41 million (liquor).
The reply was issued in response to a question from Tampin MP Datuk Mohd Isam Mohd Isa, who sought updated smuggling figures and information on the government’s readiness for the anticipated vape ban, which he warned could fuel a new illicit market.
The ministry acknowledged the concern, cautioning that the move “could create a new black market threat”, but stressed that contingency plans are in place.
The department has shifted its strategy from case numbers to targeting “high-impact cases” involving major seizure values and significant tax implications.
“The Customs Department has moved from an output-based approach to an outcome-based one. The main focus is on high-impact cases, particularly those involving large-scale container shipments.
“This is to maximise enforcement effectiveness and protect national revenue more comprehensively,” the ministry said.
It added that smaller retail-level smuggling cases would continue to be monitored.
“Other ongoing measures include joint operations with domestic and international agencies, enhanced intelligence-sharing and the deployment of advanced enforcement tools, such as upgraded surveillance systems, AI-equipped cargo scanners, four-wheel drive enforcement vehicles and the upcoming installation of three Mobile Backscatter X-ray units by the end of 2025.
“Effective and efficient anti-smuggling strategies are essential to strengthening national revenue collection, safeguarding the economy and supporting the wellbeing of the people.”
