E-vape projected to add RM1bil to tax collection

A study by the Malaysian Vape Chamber of Commerce revealed that a small excise tax imposed on e-vapes could add RM1.2bil in additional taxes to the government by the year 2026.

PETALING JAYA: A potential regulation of the electronic cigarette or e-vaping industry in Malaysia could potentially add close to RM1bil to the government’s coffers each year.

A study by the Malaysian Vape Chamber of Commerce, revealed that a small excise tax figure imposed on e-vapes could grow to a forecast of RM1.2bil in additional taxes to the government by the year 2026.

The e-vaping industry which has seen remarkable growth of late looks to be in need of regulation given that traditional cigarettes are also tightly regulated, said Japan Tobacco International (JTI Malaysia).

The company said the e-vape industry, which operates in a legal regulatory framework, would also help it work in a sustainable manner alongside traditional stick cigarettes.

“Now there is nothing to regulate the e-vape industry. So when there is no control then it is out of control – anything goes. I believe vape players want to operate in a legal environment and the taxation is very low so there are no objections to that. Legalising it allows it to operate without having to be concerned of enforcement actions,” JTI Malaysia’s general manager Khoo Bee Leng said at a briefing yesterday.

In fact, JTI Malaysia’s corporate affairs & communications director Shaiful Bahari Mahpar said e-vaping is currently illegal in the country despite its growth in usage.

“Currently there is a law with the Poisons Act 1982 where the sale of nicotine needs to go through a legal channel such as through a pharmacist. But this is not imposed on vape sellers,” Shaiful said.

“In theory e-vapes are illegal but you can find vape shops everywhere these days. It is being sold online, and they are being sold in various shapes including those that attract children.

“They can give free samples while we are not allowed to give free samples to people. We are also subjected to a minimum price of RM12 per pack while they can sell it as low as RM5 if they want to,” he added.

He said a step towards properly regulating it is for the health minister to exempt e-vapes liquids that contains nicotine from the Poisons Act.

“It then removes vape products from being a scheduled poison. And concurrently, the minister should enact regulations concerning e-vapes through The Control of Tobacco Product (Amendment) Regulations 2010 – this doesn’t need parliament approval,” Shaiful said.

Meanwhile, Khoo said JTI also had its own e-vape brand in other regions such as the United Kingdom and Europe but could not operate in the country because e-vapes are illegal here in theory.

On another matter, JTI Malaysia said it hoped the government would not raise taxes any further for cigarettes as it does not increase tax revenue but instead causes a reverse effect to grow the illicit market.

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