RM183.1mil taxed from e-cigs, vape products channelled to consolidated fund, says Anwar


KUALA LUMPUR: RM183.1mil in total was taxed from electronic cigarettes and vape products in three years between 2021 and 2024, says Prime Minister Datuk Seri Anwar Ibrahim.

This figure includes e-cigarettes containing nicotine and those without, said Anwar who is also Finance Minister in a written parliamentary reply to Datuk Dr Ahmad Yunus Hairi (PN-Kuala Langat).

From the total figure, RM100.3 million was collected for nicotine-containing smoking products, he added.

Both nicotine and non-nicotine liquid or gel used in electronic cigarettes and vapes were subject to an excise duty at a rate of 40 cents per milliliter.

“In addition, all types of electronic and non-electronic cigarette devices, including vapes, are subject to excise duty, but at an ad-valorem rate of 10%,” he said.

Taxation for non-nicotine liquid and gel commenced on Jan 1, 2021, while for nicotine counterparts, it commenced on May 1, 2023.

He said the tax collection would be channelled to the government’s consolidated fund, as required by Article 97(1) of the Federal Constitution.

“Any withdrawals from this fund to finance administrative and developmental expenditures, including health care programmes and projects, will need to go through the annual national budget preparation process,” he said.

It was previously reported that the Galen Centre for Health and Social Policy has urged the government to earmark half of the revenue taxes imposed on nicotine and non-nicotine liquids to support public health initiatives.

According to them, vape tax revenue should be used to rectify the consequences of unrestricted and unprohibited marketing and sales of disposable nicotine vape devices.

It also noted that the Finance Minister’s budget speech on 24 February 2023 made references to allocating the taxation from vape products for health.

Tax for vape nicotine liquids was introduced in Budget 2023 which also meant that nicotine liquids and gels were exempt from the Poisons Act 1952.

The move has sparked criticism from health experts and doctors who expressed concern about the legalisation of vape and e-cigarettes.

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