Malaysia Imposes 40 Sen Per Millilitre Excise Duty on Vape Liquids Containing Nicotine

The Malaysian government has gazetted a new excise duty for vape liquids that contain nicotine. Effective from tomorrow, the tax will be charged at 40 sen per millilitre. This move is part of the government's efforts to regulate and tax liquid or gel products containing nicotine, despite it being technically illegal.

The announcement was made by Prime Minister Datuk Seri Anwar Ibrahim under subsection 6(1) of the Excise Act 1976. The Excise Duties (Amendment) Order 2023 will come into effect tomorrow following the announcement.

The revenue generated from the excise duty will be split equally between the government and the Health Ministry. During the budget announcement earlier this year, Anwar announced that liquid or gel products containing nicotine are widely used with electronic cigarettes and vaping, with an estimated worth of RM2 billion.

In 2022, the previous government announced plans to collect taxes from vape liquids containing nicotine. However, the enforcement was postponed, and the current government has now taken over the initiative.

A study by tobacco firm JTI Malaysia projected that the government missed the opportunity to collect RM866 million in taxes last year from liquids used for vaping or electronic cigarettes. Therefore, the new excise duty aims to capture a significant revenue stream that has previously gone untaxed.

The Health Ministry has expressed its commitment to speeding up the tabling of the Tobacco Control Bill in Parliament following the new taxation on liquid nicotine. However, two associations representing healthcare professionals in Malaysia have voiced their opposition to the government's decision to exempt nicotine as a controlled substance under the law ahead of the new taxation against vape products.

In conclusion, the Malaysian government's decision to impose a new excise duty on vape liquids containing nicotine will generate significant revenue for the government and Health Ministry. The move aims to regulate and tax an industry that has previously gone untaxed, thereby contributing to the country's overall economic growth.

FAQs

1. What is the new excise duty for vape liquids in Malaysia?

• The new excise duty for vape liquids containing nicotine in Malaysia is 40 sen per millilitre.

1. When will the new excise duty come into effect?

• The new excise duty will come into effect from tomorrow, following the commencement of the Excise Duties (Amendment) Order 2023.

1. How will the revenue generated from the excise duty be allocated?

• The revenue generated from the excise duty will be split equally between the government and the Health Ministry.

1. Why did the Malaysian government decide to impose a new excise duty on vape liquids containing nicotine?

• The Malaysian government's decision to impose a new excise duty on vape liquids containing nicotine aims to regulate and tax an industry that has previously gone untaxed, contributing to the country's overall economic growth.

1. What is the estimated worth of liquid or gel products containing nicotine in Malaysia?

• Liquid or gel products containing nicotine in Malaysia are estimated to be worth RM2 billion.