9 in 10 cigarettes in Brunei 'illicit'
Wednesday, October 2, 2013
Country tops 10 Asian marts on ratio of illegal tobacco use
TIGHTER regulations imposed on tobacco products and lack of access have opened up the illicit market for cigarettes in the sultanate, with nine in 10 cigarettes consumed in the country sourced unlawfully.
A study of 11 Asian markets conducted by the International Tax and Investment Centre and Oxford Economics and released two days ago reported that 89.8 per cent of the cigarettes consumed in Brunei last year were sourced illicitly, with only 10.3 per cent bought through legal means.
This makes Brunei the economy with the highest incident of illicit cigarette consumption, when measured as a percentage of total usage, among the 11 markets covered by the 'Asia-11 Illicit Tobacco Indicator 2012'.
"Excise tax was substantially increased in November 2010, from $60 per kg to $250/1,000 (by 339 per cent), and more stringent requirements were introduced for retail licences. The resulting large fall in the number of retailers made it difficult for consumers to access legal duty-paid cigarettes," the study said.
Charts from Oxford Economics show that after the excise tax was imposed in November 2010, legal domestic sales volumes of cigarettes fell drastically from over 350 million sticks in 2009, to around 300 million in 2010.
By 2011, the number of cigarettes legally bought domestically fell to a little over 50 million, and by 2012, it was down to 36 million.
The study, however, estimates that in 2012, a total of 351 million cigarettes were consumed, indicating that 315 million of these were sourced illicitly.
The study based its estimates on the average of the Empty Pack Surveys from 2011 and 2013.
"The Empty Pack Survey reveals some inflows into Brunei of duty-free cigarettes and duty-paid cigarettes from Malaysia and Indonesia," the study said.
"Most non-domestic cigarettes are designated as 'unspecified' but are likely to come from neighbouringcountries."
A bottom-up estimate of total consumption using smoking prevalence, average cigarette consumption, and population corroborates the figures, suggesting "an illicit share of around 87 per cent", the study added.
The decision of foreign tobacco makers to leave the country also contributed to the collapse of the legal domestic market in Brunei, the study said.
"Brunei's legal domestic sales ... collapsed after a series of radical regulatory and fiscal measures caused international tobacco manufacturers to exit the market," it said.
"The collapse of the legal market after the exit of international tobacco manufacturers left the market served largely by illicit imports."
The study estimates that the government lost $79 million in taxes from the illicit consumption of cigarettes last year.
The study, which was funded by Philip Morris Asia, also looked into the cigarette consumption of Indonesia, Thailand, the Philippines, Australia, Taiwan, Vietnam, Singapore, Pakistan, Malaysia and Hong Kong.
Hong Kong trails Brunei in the list as the market with the second highest percentage of illicit use, at about 35.9 per cent of the total domestic consumption. It is followed by Malaysia, with 34.5 per cent, and Pakistan at 25.4 per cent.
The 11 markets covered by the report consumed an estimated 736.4 billion cigarettes in 2012, of which nine per cent or 66.5 billion are estimated to have been sourced illicitly.
The Brunei Times
TIGHTER regulations imposed on tobacco products and lack of access have opened up the illicit market for cigarettes in the sultanate, with nine in 10 cigarettes consumed in the country sourced unlawfully.
A study of 11 Asian markets conducted by the International Tax and Investment Centre and Oxford Economics and released two days ago reported that 89.8 per cent of the cigarettes consumed in Brunei last year were sourced illicitly, with only 10.3 per cent bought through legal means.
This makes Brunei the economy with the highest incident of illicit cigarette consumption, when measured as a percentage of total usage, among the 11 markets covered by the 'Asia-11 Illicit Tobacco Indicator 2012'.
"Excise tax was substantially increased in November 2010, from $60 per kg to $250/1,000 (by 339 per cent), and more stringent requirements were introduced for retail licences. The resulting large fall in the number of retailers made it difficult for consumers to access legal duty-paid cigarettes," the study said.
Charts from Oxford Economics show that after the excise tax was imposed in November 2010, legal domestic sales volumes of cigarettes fell drastically from over 350 million sticks in 2009, to around 300 million in 2010.
By 2011, the number of cigarettes legally bought domestically fell to a little over 50 million, and by 2012, it was down to 36 million.
The study, however, estimates that in 2012, a total of 351 million cigarettes were consumed, indicating that 315 million of these were sourced illicitly.
The study based its estimates on the average of the Empty Pack Surveys from 2011 and 2013.
"The Empty Pack Survey reveals some inflows into Brunei of duty-free cigarettes and duty-paid cigarettes from Malaysia and Indonesia," the study said.
"Most non-domestic cigarettes are designated as 'unspecified' but are likely to come from neighbouringcountries."
A bottom-up estimate of total consumption using smoking prevalence, average cigarette consumption, and population corroborates the figures, suggesting "an illicit share of around 87 per cent", the study added.
The decision of foreign tobacco makers to leave the country also contributed to the collapse of the legal domestic market in Brunei, the study said.
"Brunei's legal domestic sales ... collapsed after a series of radical regulatory and fiscal measures caused international tobacco manufacturers to exit the market," it said.
"The collapse of the legal market after the exit of international tobacco manufacturers left the market served largely by illicit imports."
The study estimates that the government lost $79 million in taxes from the illicit consumption of cigarettes last year.
The study, which was funded by Philip Morris Asia, also looked into the cigarette consumption of Indonesia, Thailand, the Philippines, Australia, Taiwan, Vietnam, Singapore, Pakistan, Malaysia and Hong Kong.
Hong Kong trails Brunei in the list as the market with the second highest percentage of illicit use, at about 35.9 per cent of the total domestic consumption. It is followed by Malaysia, with 34.5 per cent, and Pakistan at 25.4 per cent.
The 11 markets covered by the report consumed an estimated 736.4 billion cigarettes in 2012, of which nine per cent or 66.5 billion are estimated to have been sourced illicitly.
The Brunei Times
No comments:
Post a Comment