The black market today presents the most serious and growing threat to Malaysian consumers, it said in a statement to Bernama.
It claimed that the RM300 billion Malaysian black market is headed for a ‘boom’ due to income loss, job security concerns and changing purchasing habits that have resulted from the on-going Covid-19 pandemic.
CCC managing director Fred Roeder said the tobacco black market, for example, hurt all Malaysian consumers as it causes the government to lose RM5 billion in uncollected tax annually, harm legitimate retailers and fuels corruption at all levels of the public sector.
“Malaysia currently tops the world in the tobacco black market, commanding a market share of over 62 per cent in total cigarettes sold. If such products can easily enter the marketplace, what about other items like drugs, unregulated pharmaceuticals or fake goods?” he said.
Hence, he said, Budget 2021 provides an ideal opportunity for the government to address the black market in an urgent and comprehensive manner in order to safeguard consumers and re-energise the country’s economy.
For Budget 2021, he said the CCC recommended that a special allocation should be put in place for relevant government ministries and agencies to conduct roadshows throughout the country to educate consumers and deter them from buying black market products.
“Secondly, structural reforms are required to close the price gap between legitimate products, which carries an artificially inflated price due to taxes and excise duties, versus black market products.
“If the difference in price is small, consumers would prefer to buy legal products and black market perpetrators will lose their motivation to smuggle illegal goods,” he said.
The third recommendation is for the government to give more funding for better enforcement, especially in the e-commerce space.
“Relevant enforcement agencies should be provided with the resources required to curtail the black market. The explosion of consumers buying online under the new normal have provided black market perpetrators new avenues and opportunities.
“The authorities must have the funding and new technologies to nip this growing threat in the bud,” he added.
The CCC is a not-for-profit lobby organisation, which was set up in February 2017, with offices in the United States, Canada and the European Union.
Representing consumers in over 100 countries across the globe, it is closely monitoring regulatory trends in Kuala Lumpur, Ottawa, Washington, Brussels, Geneva and other hotspots.
— Bernama
