Nielsen Report: Rampant Illegal Cigarette Trade in Malaysia Causes Annual Tax Loss of Up to RM5 Billion

Jun.16
Nielsen Report: Rampant Illegal Cigarette Trade in Malaysia Causes Annual Tax Loss of Up to RM5 Billion
According to data from the internationally renowned market research firm NielsenIQ, the illegal cigarette trade in Malaysia results in tax losses of RM5 billion (USD 1.1 billion) annually. Illegal products account for 54.6% of the market, with Johor, Selangor, and Sabah identified as smuggling hotspots. Customs authorities have successfully seized 6 million smuggled cigarettes.

Key Points:

 

·Illegal cigarette trade in Malaysia leads to approximately RM 5 billion (USD 1.1 billion) in tax revenue losses each year. 

 

·54.6% of the cigarette market in the country is dominated by illegal products.

 

·The main issues are related to smuggling of popular brands and counterfeit tax stamps. 

 

·Johor, Selangor, and Sabah are the main hotspots for smuggling activities.

 


 

According to the latest NielsenIQ report (NielsenIQ, a globally renowned market research firm — noted by 2Firsts) released in March, Malaysia loses up to RM 5 billion (USD 1.1 billion) in tax revenue annually due to illegal cigarette trafficking. Illegal cigarettes account for 54.6% of the country's market, indicating the scale and power of the black market.

 

Illegal cigarette trading not only causes the government to lose important revenue, but also seriously hinders the advancement of public health in the country. Studies show that ten major smuggling brands occupy approximately 75% of the illegal cigarette market nationwide, making them one of the main reasons for ongoing tax revenue loss.

 

The report highlights the particularly serious issue of counterfeit tax stamps. 69% of illegal cigarette packs do not have tax stamps, while 31% have counterfeit tax stamps, indicating that smuggling groups are becoming increasingly sophisticated. According to data from March 2025, fake tax stamps were found on 16.7% of confiscated illegal cigarette packs, compared to 15.6% in May 2024. This upward trend shows that criminal networks are increasingly able to bypass law enforcement and exploit loopholes in regulatory systems.

 

Furthermore, it was found that the top ten brands of counterfeit tax stamps do not overlap with the top ten most commonly smuggled brands, indicating that illegal trade networks are more widespread and complex than previously understood. Johor, Selangor, and Sabah have been identified as key hotspots for smuggling activities, serving not only as important entry and distribution points for illicit tobacco products, but also representing a significant portion of nationwide cigarette consumption. As a result, they have become focal areas for law enforcement efforts.

 

Despite the seriousness of the issue, the study also pointed out a slight improvement in the problem. The prevalence of illicit cigarettes decreased from 54.8% in January 2024 to 54.6% in March 2025. This minor decline was attributed to the government's continued enforcement efforts. The study also highlighted a long-term downward trend, with the proportion of illicit cigarette consumption steadily decreasing since reaching a peak of 63.8% in 2020. This improvement is believed to be due to stricter enforcement and the prohibition of tobacco product trafficking.

 

We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

Reuters: BAT to Launch Synthetic Nicotine Vape Vuse One in U.S., Hitting Shelves in Three States from Late September
Reuters: BAT to Launch Synthetic Nicotine Vape Vuse One in U.S., Hitting Shelves in Three States from Late September
British American Tobacco (BAT) plans to pilot sales of its disposable synthetic nicotine vape, Vuse One, in the United States, with launches expected in South Carolina, Florida, and Georgia in late September. The product has not yet received approval from the U.S. Food and Drug Administration (FDA). According to Reuters, this move marks a major shift in BAT’s stance after years of opposing the sale of unauthorized vapes. The company said the product will be distributed through major national ret
Aug.21 by 2FIRSTS.ai
2Firsts to Host Special Session at InterTabac on September 19
2Firsts to Host Special Session at InterTabac on September 19
2Firsts will host a special session at the InterTabac exhibition in Dortmund on September 19, 2025, under the theme “From Change to Opportunity.” As an official media partner, 2Firsts will highlight technology, supply chain, market, and capital opportunities while fostering global dialogue.
Sep.15
Mexico Mulls 30% Tobacco Tax Hike from 2026; Industry Warns of Illicit Market Growth and Revenue Losses
Mexico Mulls 30% Tobacco Tax Hike from 2026; Industry Warns of Illicit Market Growth and Revenue Losses
Mexico’s National Tobacco Industry Council (Conainta) has raised concerns over a federal proposal to increase the Special Tax on Production and Services (IEPS) on cigarettes and nicotine products by more than 30% starting in 2026, and to levy up to a 200% tax on alternative nicotine products. Conainta and the Mexican Confederation of Industrial Chambers (Concamin) estimate illicit consumption could climb to 50%, with annual fiscal losses of MXN 13–15 billion.
Sep.22 by 2FIRSTS.ai
Minnesota Teacher Charged with Sharing Marijuana Vape with Students During Utah Field Trip
Minnesota Teacher Charged with Sharing Marijuana Vape with Students During Utah Field Trip
A Minnesota teacher has been charged with three counts of drug distribution for allegedly providing a marijuana vape to underage students during a field trip in Utah.
Aug.21 by 2FIRSTS.ai
Sneak Peek | Vabeen Unveils Full Line of New Products at InterTabac 2025, Focusing on Upgraded Experience and Technological Innovation
Sneak Peek | Vabeen Unveils Full Line of New Products at InterTabac 2025, Focusing on Upgraded Experience and Technological Innovation
Vabeen will unveil its complete product line—disposable, pod, and open-system devices—at booth 6.A24 at InterTabac 2025. The showcase highlights the brand's latest innovations in high capacity, multi-flavor, and smart devices, demonstrating its strategic focus and strength in the global market.
Sep.17
ICA Seizes Over 18,400 E-Vaporisers at Tuas Checkpoint — Largest Land-Checkpoint Haul Since Tougher Penalties Took Effect
ICA Seizes Over 18,400 E-Vaporisers at Tuas Checkpoint — Largest Land-Checkpoint Haul Since Tougher Penalties Took Effect
Singapore’s Immigration & Checkpoints Authority (ICA) intercepted a Malaysian-registered lorry at Tuas Checkpoint and uncovered more than 18,400 e-vaporisers and about 1,400 related components misdeclared as “components for motorised external roll-up blinds.” ICA says this is the largest haul detected at land checkpoints since stiffer penalties for vape offences came into force on Sep 1, 2025. One Malaysian man was arrested and the case was referred to the Health Sciences Authority (HSA).
Sep.17 by 2FIRSTS.ai