Galen Centre for Health and Social Policy said if the country keeps the prices of tobacco products low, it risks becoming a hub where such products are legally purchased and “smuggled into Singapore as contraband”.

“This would undermine both countries’ public health goals, depriving governments of revenue, and empowering organised crime.

“Malaysia should not be a supply base, directly or indirectly, for illicit tobacco flows into our neighbours,” its CEO, Azrul Khalib, said in a statement.

He suggested that Malaysia emulate Singapore by announcing a 20% across-the-board increase in tobacco excise duty effective Feb 12.

Singapore’s prime minister, Lawrence Wong, who is also the finance minister, was reported as saying the move to increase the excise duty is to discourage its consumption.

Azrul said Singapore’s move is a “clear reminder” that higher tobacco taxes are a proven, effective way to reduce smoking and protect public health.

He said the World Health Organization has repeatedly affirmed that raising tobacco excise taxes and prices is among the most effective and cost-effective measures to reduce tobacco use.

“Malaysia should not lag behind. A stronger excise regime reduces affordability, discourages uptake among youths, supports quitting, and narrows the price incentive that smugglers exploit,” he said.

He also said that on average, excise duties on cigarettes bring in RM3.3 billion annually.

An increase of 20% on cigarettes alone would bring in an additional RM500 million a year in excise revenue, he said, adding that the funds could be channelled for healthcare.

“Currently, for every RM1 collected from tobacco taxes, Malaysia spends RM4 for the treatment and care of people stricken with smoking-related diseases such as lung cancer.

“The current tax collected is disproportionately lower than the cost of treating smoking-related diseases.”