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Who should Malaysia blame for its booming illicit cigarette trade? The Malaysian government has raised taxes on cigarettes. Is this a way to increase the falling government tax revenue? The National Health and Morbidity Survey 2015 reported, about five million of the Malaysian population aged 15 and above were smokers. Deaths caused by smoking are set to increase to 30,000 in the year 2020. The government has decided to raise cigarette prices once again to curb the nation’s rising cigarette consumption. Using cigarette tax hike as a solution has failed to work Price hikes intensified around the year 2014, and there was a sharp decline of 12% in legalised sale of cigarettes. During the most recent tax hike, prices for a pack of 20 cigarettes rose from RM17 (US$4.02) to RM21.50 (US$5.08). Illicit cigarette trade filled up the gap left by legal sales. Its penetration rate increased from 36.3% in 2011 to 51% in 2016.