KUALA LUMPUR: Customs Department director-general Datuk Seri Khazali Ahmad insisted his agency was actively enforcing laws against illicit cigarettes that were cited as a reason for a tobacco firm’s decision to close a factory in Petaling Jaya.
Declining to comment on the British American Tobacco (M) restructuring that will see 230 workers at the plant lose their jobs, Khazali said his department has consistently gone after cigarette smugglers in the country.
“We have already arrested many who are involved in the illicit cigarettes trade, before the increase in the excise duties and after,” Khazali said, but said he did not have full details on hand.
In a filing to Bursa Malaysia yesterday, BAT said it is closing its factory located on Jalan Universiti in stages, and is targeting to cease all activity there by the second half of 2017.
It also said 230 workers will be retrenched as part of a restructuring exercise that it attributed to falling sales due to high duties on tobacco goods and the weak ringgit.
BAT also said a spurt in illicit cigarettes was jeopardising the sales of its brands, which includes Rothmans, Dunhill, Benson & Hedges, Lucky Strike, Pall Mall and Kent.
Putrajaya most recently raised its cigarette levy last November by 12 sen/stick — a four-fold increase from the previous 3 to 4 sen hikes in the sin tax from previous years.
Subsequently, tobacco firms such as BAT raised the retail prices of their offerings by up to RM3.20 per box of 20 cigarettes.
