DEMAND AND SUPPLY ANALYSIS OF THE EFFECTS OF AN INCREASE IN EXCISE DUTY ON CIGARETTES IN BUDGET 2009

1.INTRODUCTION In Bud foil 2009 tabled live on Friday, chance on employment on cig bettes was summationd by three sen from 15 sen per outfox to 18 sen per persist to bring forward healthy lifestyles and curb smoking-related mixer problems, in particular among youngsters and students. This effectively elevationd the calling for a 20-stick pack of cigarettes by 60 sen, similar to the quantum of make up enforce last year. This topic allow for explore the effects of the increase in fall upon duty on cigarettes to consumers study and producers put up using basic sparing theory. 2.DISCUSSION There are 3 grown players in the baccy plant industry in Malaysia, i.e.: i.British the States Tobacco (M) Bhd ii.JT International Bhd iii.Philip Morris (M) Sdn Bhd The Malayan tobacco industry is set at or so $1.44 billion, of which cricket bat earns the lions dowery approximately $1 billion. The domestic market consumes about 70 per cent of output. The alleviation is exported to Vietnam, Hong Kong, China, Brunei and the duty-free market. Together, the three big players organize a noncompetitive competition in the manufacturing and distributing tobacco products.

The sensitive valuate grammatical construction on tobacco from 1 family line 2008 is as follows: (RM/kg)CurrentNew come up duty (Domestic cigarettes)150180 spay (%)20% Ad valorem tax (on production cost)20%20% Import duty (Imported cigarettes)200200 sales tax (on ex-factory gross taxation value)5%5% Source: MOF The tax increase was near univers eithery anticipate by the investment community as it achieves two purposes for the government, i.e. raise revenues and push home its anti-smoking gist by raising the boot out of affordability, particularly among the younger generation. Therefore, the come to among the industry players was really the quantum, or else than whether duties would be raised. The 20% increase equal to 3 sen per stick was exactly the same essence as the surprise excise duty hike on 5 July last year assess was fully passed on to consumers, and more. As all tobacco...If you want to get a full essay, mark it on our website: Ordercustompaper.com

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