This Report provides an overview of the nature of the illicit trade of cigarettes across a selection of Asian markets. It establishes estimates of consumption of illicit cigarettes and the impact this has on tobacco tax revenue. This is the fifth year of the Asia Illicit Tobacco Indicator Report. This year, the Asia Illicit Tobacco Indicator Report covered 16 markets: Australia, Cambodia, Hong Kong, Indonesia, Laos, Macao, Malaysia, Myanmar, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.
An estimated 16.1% of all cigarettes consumed across sixteen Asian markets were illicit in 2016. This is equivalent to around 131.2 billion illicit non-tax-paid cigarettes consumed.
Illicit Consumption was concentrated in five markets: Indonesia, Malaysia, Pakistan, Philippines, and Vietnam. Together, these markets accounted for over 92% of total Illicit Consumption in 2016.
Illicit Incidence was estimated to be higher than 10% in 10 markets: Australia, Hong Kong, Indonesia, Laos, Macao, Malaysia, Pakistan, Philippines, Singapore, and Vietnam.
Domestic Illicit cigarettes (i.e. domestically produced but non-duty paid cigarettes, identified only in Indonesia, Pakistan, and the Philippines) accounted for 9.4% of Total Consumption across the sixteen markets in 2016. This is equivalent to an estimated 76.9 billion cigarettes.
Non-Domestic Illicit Consumption was estimated at 54.3 billion cigarettes in 2016, equivalent to 6.7% of Total Consumption.
Non-Domestic Illicit Consumption was composed of Unspecified Market Variant, Contraband, and Counterfeit cigarettes.
Unspecified Market Variant products were concentrated in Cambodia, Vietnam, Malaysia, Taiwan, and Australia. Consumption increased in 2016 to 44.5 billion cigarettes compared with 35.8 billion in 2015.
Contraband consumption was estimated at 8.4 billion cigarettes. Contraband was the primary source of Illicit Consumption in Hong Kong, Macao, Malaysia, New Zealand, Singapore, and South Korea.
A total of 1.3 billion Counterfeit cigarettes were consumed across the sixteen markets in 2016. The Philippines was the largest market, where an estimated 997 million Counterfeit cigarettes were consumed.
The Tax Loss associated with illicit tobacco in 2016 was estimated at USD 5.6 billion across the sixteen markets in this Report. Over 70% of the estimated Tax Loss was concentrated in four markets; Australia, Indonesia, Pakistan, and Malaysia.