Prices of JTI brand cigarettes to increase following 10% Sales Tax

PETALING JAYA: JT International Bhd (JTI Malaysia) said there will be an increase in cigarettes prices for all the brands that it distributes in Malaysia, following the introduction of Sales Tax with effect from Sept 1.
JTI Malaysia managing director Cormac O’Rourke said in a statement that the decision came after taking into account the incremental rate differential from the previous Goods and Services Tax (GST) rates levied on cigarettes.
Cigarette prices had not been revised post June 2018 zero rating of GST following directives from the Finance Ministry and the Ministry of Health, O’Rourke said.
He said the company was disappointed that the government had not reverted to the 5% Sales Tax rate imposed from before GST introduction.
Additionally, he said the upcoming Sales Tax, which will take effect following all necessary regulatory approvals, will have a negative impact on widening the price gap between legal and illegal cigarettes.
“We believe that this will worsen the illegal cigarette trade situation which is already at a critical level, 58%, and will cause more consumers to switch to cheap illegal cigarettes. Therefore, we urge the government to improve enforcement efforts to address the illegal cigarette trade situation,” he added.