Booze tax

DID you know that Malaysia has the second highest excise duty for alcoholic drinks in the world, after Norway, and the highest in Asia Pacific?

Based on 2009 data from Deloitte Research & Analysis, almost half the amount paid on every can in Malaysia goes to excise duty.

A common consensus among industry players was that the extraordinarily high excise the Government imposes on alcohol does more harm than good.

Confederation of Malaysian Brewers Bhd is concerned that it could lead to a rising number of consumers opting to consume compounded hard liquor (CHL).

According to Renuka Indrarajah, a CMBB governing council member, CHL can contain up to 40% alcohol (beer has 4-5%). Its low retail price is possible due to its low excise duty, which is six times lower than for beer.

“CHL are products that are blended locally while our products are manufactured according to international standards in our breweries that are HACCP-certified,” said Renuka. (HACCP stands for hazard analysis critical control point.)

According to mixologist Ben Ng, the government’s approach to alcohol-related issues has always been reactive.

“One of the most common strategies is to increase alcohol taxation,” he said. “They should adopt a more proactive method, such as recruiting industry experts to advise them on the current situation and how they can help in handling alcohol-related problems.”

Managing director of the Sid’s Pubs chain Geoffrey Siddle concurs, adding that if the prices for alcoholic drinks keep rising, people will start looking for cheaper alternatives such as drugs and cheap liquor. This will also lead to an increase in illegally imported alcohol.

Deepak Gill, spokesman for the Alcohol Consumers Network (Alcon), reckons the government should freeze any further taxation until a thorough study is done on the impact of these prices on Malaysian consumers, and compare our tax structure with other countries around the world.

“Malaysians pay the second highest tax in the world after Norway, which is unfair considering our per capita income is nine times lower than Norway’s,” he said.

Alcon is a group of consumers who have come together to campaign for lower prices for alcoholic beverages (http://on.fb.me/bLyWrN).

Deepak also called upon the government to lower the taxes on legitimate, high-quality imported alcohol, and correspondingly increase the taxation on CHLs.


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