Business

Thursday August 27, 2009

Govt urged to cap excise duty


KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd, which pays about RM1bil in excise duty per annum, has called on the Government to put on hold any plans to increase the excise duty on liquor products for next year.

“We urge the Government to cap the excise duty as any increase would be detrimental to the industry in these tough economic times,” managing director Soren Holm Jensen told reporters at the Carlsberg Malaysia Rountable Dialogue On Excise Duty yesterday.

“The excise duty rate in Malaysia is already very high, second in the world only to Denmark, which makes beer and stout very pricey compared with other countries.

“We support responsible drinking and the Government should not impose higher excise duty rates as it will not only impact our bottom line, but also encourage drinkers to switch to cheaper products, which have higher alcohol content, or smuggled goods,” he added.

Soren Holm Jensen (left) and Carlsberg executive director Datuk Chin Voon Loong

The dialogue session was attended by several established players in the food and beverage (F&B) industry who also lobbied for a cap on excise duty.

Jensen said: “The brewing industry contributes about 3.5% to the gross national product or RM13bil per year and provides employment (directly or indirectly) to half a million people related to the industry,” he noted.

He added that any increase would have to be passed on, which would have a negative impact on many industries, including the F&B, tourism and entertainment industries.

The Malaysian Association of Hotels secretary general Sam Cheah said there was not only a need to cap the excise duty level, but also to progressively work towards a lower excise duty rate as the current level discouraged many tourists to stay longer in Malaysia due to the high cost of entertainment, compared with neighbouring countries.

“This is reflected in the lower occupancy rates in hotels, despite us offering very competitive rates in the region,” he said.

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