Bandar Seri Begawan - Following the increase in excise duties on tobacco products on November 1, several shops selling cigarettes have seen a downturn in their sales.
The excise duty on tobacco was increased to 25 cents per cigarette from $60 a kg and those entering the country are no longer allowed to bring in duty-free cigarettes. The tax hike raised cigarette prices by about $5 per carton of 20 cigarettes.
Shahidah Hj Saadi, owner of the C7 Minimart in Gadong, said in a phone interview with The Brunei Times cigarette sales have fallen up to 50 per cent since the tax hike. While they continue to sell the product, taking into account the $2,500 annual licence fee required for vendors to sell cigarettes, their profit margins have significantly reduced.
"Right now profits are low but they should eventually increase if customs rigorously controls the cigarettes coming into the country," said Shahidah who has heard of people obtaining cigarettes illegally for around $1.50 a pack but did not know where from. Since the tax hike, she felt that the smuggling of cigarettes has greatly increased.
"Selling cigarettes is still worth it but the in-country sales need to go up. Once it does, our profits should return to pre-tax figures as long as people are not obtaining them illegally."
The Brunei Times reported last week that a 36-year-old man was fined $38,000 by the Magistrate's Court pleading guilty to smuggling 128 cartons of cigarettes on November 10. Ampuan Hj Mohamad Aidi Ismawindy Ampuan Hj Idris was given two months to settle the fine or face seven months in prison for failure to do so.
A similar situation is being felt at the Teeyem Majeed store in Kampung Kilanas where they are still selling cigarettes but sales have decreased significantly.
"The amount we used to sell in one day, we now sell over 10 days," said Kalandar Muhaideen the store's manager adding the cheapest cigarettes sold at the shop are at $6.30 while the most expensive are at $8.
Shopkeeper of Wanika Enterprise in Jerudong, Jafarali said they are waiting to look at sales in the coming months. "In six months we will review our sales of cigarettes and decide which cigarettes to continue selling and which not to." -- Courtesy of The Brunei Times
Zareena Amiruddin
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