Malaysia's Tobacco Tax Challenge: Can a Sharp Hike Curb Consumption?

Malaysia Needs to Tackle Tobacco Consumption: A Conversation with SERI Analyst Kuala Lumpur, June 4, 2025 – The need for a significant increase in tobacco taxes in Malaysia is the focus of a recent interview with Muhammad Daniel Kittu, a Research Analyst at the Social & Economic Research Initiative (SERI). The discussion highlights the importance of addressing corruption to effectively curb tobacco consumption. Kittu argues that "sharp increases" in tobacco taxes are essential to reduce consumption, particularly among low-income individuals who are highly price-sensitive. He points to Brazil's experience, where a 62% excise tax increase between 2012 and 2014 resulted in increased revenue and reduced consumption. However, Kittu cautions that corruption remains a significant obstacle, as it can fuel the illicit trade of cigarettes, undermining the positive effects of tax increases. "Something like tobacco taxes is actually kind of unique because generally, low-income individuals are a lot more price-sensitive to these products," Kittu explains. The analyst's insights provide valuable context for policymakers considering tobacco control measures in Malaysia, emphasizing the need for both tax increases and robust anti-corruption efforts. The interview underscores the complexities of tobacco control and the importance of a multi-faceted approach to effectively reduce consumption and generate revenue.