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Business trends

Cigarette smuggling gouges Asia's taxes, anti-smoking drive

Indonesia, Malaysia, Philippines see billions in revenue go up in smoke

SINGAPORE -- With Asia facing potentially debilitating health care costs related to high rates of smoking, many countries have been trying to curb tobacco consumption by increasing taxes. But this seems to have backfired by triggering an upswing in smuggling that has undermined tax revenues without doing much to protect the public.

One of the most prominent cases is Malaysia, where the government has been raising taxes on cigarettes for several years. At the end of 2015, the levy was bumped up by 40%, now accounting for over half the price of a pack of 20 major-brand cigarettes, which costs around 12 ringgit to 17 ringgit ($2.84 to $4.02).

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