The Malaysian tobacco industry is a wide ranging industry
The Malaysian tobacco industry is a wide ranging industry which encompasses leaf production and curing, product manufacturing to product marketing and distribution. Hence, it is not surprising that the industry contributes substantially to the country's economy with more than 190,000 people depending on it for employment in 2003, according to a study conducted by Ernst and Young in June 2005 for the Confederation of Malaysian Tobacco Manufacturers.
The industry ranked 5th out of 92 sectors with the total economic output being RM11.7 billion or 3% of GDP.
In 2004, the industry contributed RM1.8 billion in indirect taxes and RM683 million in corporate taxes. Indirect taxes from the tobacco industry represent 7.8% of the Malaysian Government's total indirect tax revenue while approximately 3% of the Malaysian Government's income tax revenue is derived from corporate taxes within the tobacco industry.
Tobacco is the country's most widely cultivated non-food crop. It is grown mostly on the coastal bris soil in the east coast of Peninsula Malaysia. Malaysian farmers choose to grow it because it is hardy and is known for fetching stable prices. Kelantan, Terengganu and Sabah are the major tobacco-growing areas in Malaysia. Tobacco cultivation in Peninsula Malaysia has grown from a mere 8 hectares in 1959 to 12,148 hectares in 2004. East Malaysia has more than 1,200 hectares of land dedicated to the cultivation of burley tobacco. Approximately 120,000 people are involved in tobacco farming and curing. As such, it continues to play a vital role in improving the socio-economic status of the rural population in the country.