Reaction To The New Tobacco Tax

Confusion over new tobacco tax, retail prices

CONFUSION over amended import tariffs on tobacco products yesterday led to some vendors declining to sell new stock of cigarettes.

A number of cigarette vendors in the country yesterday stopped selling fresh inventory due to confusion over whether the price hike arising from the amended customs import duties applies solely to new stock and not existing inventory.

Some vendors said they decided against selling new inventory for fear of irking consumers who would complain over varying pricing of cigarette products.

Likewise, vendors aired their concern of old stock running out with no assurances of replenishment due to the mix-up.

Some vendors interviewed by The Brunei Times said they were still selling their old stock at old prices, however, several brands have already been sold out in some parts of the country.

"We have finished up three kinds of brands and there are no new supplies today because of the sudden (increase in) prices," said Wa Su, 43, from Usaha Tasbih Sdn Bhd.

"We predict that we may run out of stock in a couple of weeks but we do not know as the decision about the prices will be coming from our suppliers," said Jafarali, store manager at Wanika in Jerudong.

The confusion stemmed from the latest amendment to the Customs Import Duties Order 2010 on tobacco products, which raises the tax to $0.25 per stick of cigarette, effective yesterday. The old order put the duty at $60 per kilogramme of tobacco products.

The amended order, some vendors said, is unclear whether the tax hike applies solely to new supplies.

The Ministry of Finance (MoF), which announced the tax increase on tobacco and cigarette products, did not explain the issue when contacted by The Brunei Times.

An MoF statement said that travellers were not banned from bringing in cigarettes but "in addition to the duty rates imposed, privileges granting duty-free concessions are hereby withdrawn, and the importation of those common duties remain".

Unconfirmed reports also reached The Brunei Times that an emergency meeting between cigarette suppliers and Customs representatives was held yesterday evening to iron out kinks in the imposition of tax.

Shopkeeper Lokman Widianto of AJ Enterprise in Gadong said: "We have not received any new distributions from suppliers as I have heard that a meeting will be held on account of the new rates."

Consumer Adi Razi said he had been to "at least three shops that had, or at least claimed, the prices were already raised (yesterday)".

He added, "And several other shops are running out of stock, even selling the packets used for display." His thoughts on the price hike: "It is good for the economy and it at least gives people an opportunity to stop smoking." The Brunei Times

Non-Smokers Applaud Cigarette Tax Hike

The public yesterday continued to welcome the move by the government to raise taxes on cigarettes and tobacco products.

Meanwhile, cigarette dealers and wholesalers could not be reached by the Bulletin yesterday and retailers said they are still waiting for the new price lists from dealers and distributors.

An Indonesian vendor in Gadong, who identified himself only as Lokman, said he is still selling cigarettes at the old prices, adding that the shop only made a profit of 10 cents or 15 cents per pack from cigarette sales.

There has also been no rush by smokers to buy cigarettes since the announcement of the tax hike, he added.

Another vendor, an Indian national, who identified himself only as Ismail, said, "As of yesterday (Monday), the price is still the same. But I'm not sure about the price tomorrow".

Hjh Haneh, a government officer, hoped that the tax hike would discourage smoking and therefore less allergen would be present in the air which would be good news for those suffering from asthma.

Fendi, a teacher, said some smokers might be furious with the drastic move which was only announced on Sunday while the enforcement took effect yesterday (Monday).

"Smokers would now buy in cartons or cross the border to duty-free shops just to get cheaper cigarettes or go to the black market. Some might smuggle in cheaper cigarette brands like ERA and LA from the neighbouring town."

Amy, a housewife who quit smoking prior to the announcement also lauded the move.

Rena, a project officer, also welcomed the move but said it could make cigarette smuggling rampant.

Hj Misli, a banker and an ex-smoker, said it was a good move to protect the children. "As we all know, cancer especially lung cancer, is the number one cause of death in Brunei for many years."

Another smoker said he would have bought in bulk if he knew about the announcement earlier.

"Now I will only bring few sticks if I hang out with my friends or put out a cigarette when I am not smoking so that it could last for one or two hours. If the tax is already $5, I wonder how much the retail price will be. It may cost up to $10 per pack."

According to a Ministry of Finance press release on Sunday, His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam had consented to amendments to excise duties on cigarettes, tobacco and tobacco products through the Customs Import Duties (Amendment) Order, 2010 and Excise Duties (Amendment) Order, 2010.

Under the new amendments, cigarettes will be subject to a $0.25 tax per cigarette stick compared to the previous $60 per kilogramme, whilst non-manufactured tobacco and tobacco refuse will be subject to duties totalling $60 per kilogramme compared to the previous $30 per kilogramme.

Cigar, cheroots and cigarillos will also see an increase in duties from $60 per kilogramme to $120 per kilogramme and from $100 per kilogramme to $200 per kilogramme.

The press release said that for those arriving in the Sultanate from any point of entry who are over the age of 17 and carrying not more than 200 sticks of cigarettes, in addition to the duty rate imposed, privileges granting duty free concessions are hereby withdrawn and the condition on the importation of those commodities remains. -- Borneo Bulletin

Smoking also burns one's pocket

Not only bad for health

THE government is making a point across the country that cigarette is bad for your health.

And with Brunei jacking up taxes, cigarettes and other tobacco products are also bad for the smokers' pockets.

These were the common opinions by Bruneians, smokers and non-smokers alike, on the impacts of the hiked up excise duty on tobacco products.

"As a non-smoker, I feel that the country is finally being more health conscious especially about the well-being of the citizens," said civial Mohd Arief Hj Majeed, 28.

He added that since other countries were selling cigarettes at a much higher price, the cigarette price here was considered cheap compared in Australia and the United Kingdom, where a packet would cost more than $10.

"I fully support this tax hike because I do not want to see my students as being future smokers," said 25-year-old education officer Nor Masitiamalina Hj Suhaini. She is of the opinion that the amendment may stop influencing the youth to pick up this addictive habit and direct the country's step towards living a healthy lifestyle.

The excise duty on tobacco has been increased effective yesterday under the Customs Import Duties (Amendment) Order 2010 to $0.25 cents per cigarette stick compared to the current $60 a kg.

This means that the excise duty on a packet of 20 cigarettes will be $5.

The Ministry of Finance announced the amendment on Sunday, saying it was by the command of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam, and was being implemented in the interests of the health and well-being of the people, especially in helping to reduce the risk of chronic diseases related to smoking.

"The high prices, honestly seems unfair, smokers have to reach deep into their pockets but I do support this cause, although it seems kind of unexpected that the law just came out without any warning or early notice," said Haddy Dzulkifly, 23, a university student.

Some unhappy smokers made a last-minute rush to stock up on cigarettes knowing that the tax hike would raise the price of a pack by up to $5.

"I just bought a carton of my favourite brand and I just cannot agree with the new amendment," said 23-year-old Army Officer Asma Farisulamin Hj Mohd Sultan.

Despite the new prices, Asma Farisulamin said he felt that he was not yet ready to quit smoking and he expressed hope that the new rule would just be temporary.

Another unhappy smoker over the new hiked up cigarette tax, private sector worker Hj Ahmad Hj Murni said, "The Tobacco Order 2005 feels already like a restraint for us smokers and we complied with that law but its seems a bit much that the prices have gone up."

With cigarettes now highly-priced, Hj Ahmad feels that maybe it's time for him to quit the habit because wasting his money on cigarette will put too much strain on his earnings.

Vendors yesterday also expressed worries the new prices would decrease their tobacco sales as they felt that this could lead customers to be discouraged.

"We are not sure on what will happen when we start with the new prices but surely customers will be unhappy about this," said Shopkeeper Lokman Widianto, 25, from AJ enterprise in Gadong. He said it was hard enough paying the licence for selling tobacco products and with this new amendment, it was unsure that vendors would be able to cover their costs.

"One packet of cigarettes may cover the cost for about two to three packets if compared to the normal price," said 43-year-old Wa Su from Usaha Tasbih Sdn Bhd. He said that he was uncertain whether customers would still want to buy cigarettes because the prices seems to be quite a "big jump".

"I can see that in a few months the number of customers will drop," said Manager Jafarali from Wanika, Jerudong.

The vendors told The Brunei Times they were still unsure when to start selling cigarettes at a higher price as they were waiting for the suppliers for new information about prices. The Brunei Times

26 fined for lighting up in public

A TOTAL of 26 smokers were recently slapped with a $150 compound fine each for smoking in and around public places last month.

The Enforcement Section of the Tobacco Control Division at the Ministry of Health yesterday reported that the smokers were caught lighting up in several operations at various public areas, including shopping malls and restaurants.

The Ministry of Health, in their ongoing efforts to enforce the Tobacco Act 2005 and Tobacco Act Regulations 2007 through the Enforcement Section, has reminded the public that their officers will not hesitate to approach those who are seen smoking in public.

Under the 2005 Tobacco Act, those who are caught smoking in public will be fined $150 for the first offence, $300 for a second offence and $1,000 fine and court date for those who are caught the third time around.

The penalty for smoking in public especially for underaged youths also includes a trip to the Counselling Section of the Ministry of Health.

Smoking is prohibited in many public areas in the country including shopping centres, the market, food stalls, bus stations and bus stops, restaurants and government buildings.

The Brunei government in its bid to further guard the health and well-being of its people, especially in helping to reduce the risk of chronic diseases related to the smoking has hiked up the excise duty on tobacco effective yesterday under the Customs Import Duties (Amendment) Order 2010 to $0.25 cents per cigarette stick. This means that the excise duty on a packet of 20 cigarettes will be $5. The Brunei Times