This is one strange incidence where the government wants the manufacturer / retailer to increase the price of the good. Yes, I am talking about cigarettes. It is as though the cigarette companies are not making enough money.
The logic for the action is not very convincing. If the tax on a pack of 20 is RM3 and the companies are selling them at RM3.50 or RM3.80, very good. And if you want to set a minimum price of RM5 to discourage smoking, then just increase the tax to say RM4.50 per pack. Why force the tobacco firms to make extra profits.
The extra tax collected could definitely be put to good use. Public health services could surely use more funding.
If setting the minimum price of cigarettes too high would encourage smuggling, then you just have to tackle the smuggling problem. Beef up your anti-smuggling units and impose heavier penalty on those caught smuggling. You can't say you wouldn't increase the price of cigarettes because you are scared of the smugglers.
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