KUALA LUMPUR - The Generational Endgame (GEG) policy can potentially result in losses of up to RM346 million in gross domestic product (GDP) contributions by 2040, according to a study by research firm Oxford Economics.
The report revealed that the implementation of GEG could also lead to the loss of over 2,700 jobs in the formal economy and an additional RM1.2 billion in annual tax revenue leakage due to illicit trade by 2040.
Oxford Economics said the actual losses could be even greater as it does not account for the recent contributions of the vape industry since its legalisation in Malaysia.
"Oxford Economics’ study indicates that banning vaping could affect the potential tax contributions of the sector, which is estimated at RM1 billion per year,” the report said.
The study also revealed that the implementation of the GEG policy could lead to growth in the illegal tobacco and vape markets as Malaysia has one of the world’s biggest tobacco smuggling problems.
"An additional 1.2 billion illicit cigarettes could enter the market each year by 2030 if this step is implemented, in a scenario where consumers affected by GEG switch to illicit alternatives compared to if the GEG policy is not implemented,” it said.
Oxford Economics said that although the GEG policy is a bold idea, a detailed analysis is needed regarding potential risks, especially when there is uncertainty regarding policy enforcement and the complex trade-offs and benefits resulting from the implementation of the GEG policy.
"A thorough assessment should be made of the potential costs, benefits and risks that could arise,” it added. - BERNAMA