$30 Million in E-Cigarette Tax: Malaysia’s Regulatory Overhaul Begins

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    On July 9, Malaysian Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim disclosed in a written response to Parliament that the Malaysian government collected approximately $30.01 million in tax revenue from e-cigarette products from 2021 to 2024. This announcement comes as the government prepares to implement the Public Health Control of Smoking Products Act 2024, set to take effect in August 2024.

    Breakdown of Tax Revenue

    The tax revenue of 141.1 million ringgit ($30.01 million) includes:

    • 82.51 million ringgit ($17.53 million) from non-nicotine e-cigarette liquids
    • 58.55 million ringgit ($12.44 million) from nicotine-containing e-cigarette liquids

    These revenues result from the government’s imposition of a 10% ad valorem tax on electronic and non-electronic smoking devices starting January 1, 2021, and an excise duty of 40 sen (approximately 8.5 cents) per milliliter on e-cigarette liquids beginning May 1, 2023. This structured taxation approach has provided significant funds to the government.

    Regulatory Measures

    Prime Minister Anwar highlighted that the government is taking proactive steps to regulate e-cigarette products more comprehensively. The Public Health Control of Smoking Products Act 2024 (Act 852), gazetted on January 2, 2024, outlines the regulatory framework for these products. The Ministry of Health is finalizing specific rules under this Act, which will include stringent regulations for e-cigarette products. Anwar stated, “The Act and the rules are expected to come into effect in August 2024. Once these regulations are in place, the regulatory framework for e-cigarette products will become more comprehensive and effective.”

    Allocation of Tax Revenue

    Anwar also mentioned that the collected tax revenue would be channeled into the government’s consolidated fund, in accordance with Article 97(1) of the Federal Constitution. This fund will provide better financial support for various national development projects, ensuring that the tax revenue contributes to the country’s broader economic and social goals.

    Government’s Stance and Statements

    Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim emphasized the importance of comprehensive regulation for e-cigarette products to protect public health and ensure market integrity. The government’s goal is to create a regulatory environment that effectively manages the risks associated with e-cigarettes while supporting public health initiatives.

    Impact on Public Health and Economy

    Stricter regulations are expected to bring significant health benefits by reducing the availability and use of potentially harmful e-cigarette products. The economic impact includes a well-regulated market that ensures consumer safety and fairness for businesses. In the long term, these measures aim to promote public health and reduce healthcare costs associated with smoking-related illnesses.

    Industry and Public Reactions

    Reactions from e-cigarette manufacturers and retailers have been mixed, with some expressing concerns about the regulatory burden and potential market restrictions. However, many public health advocates and consumers welcome the new regulations, seeing them as necessary for ensuring product safety and reducing youth access to e-cigarettes.

    Future Outlook for E-Cigarette Regulations in Malaysia

    The future regulatory landscape for e-cigarettes in Malaysia looks promising, with ongoing efforts to ensure comprehensive oversight and public health protection. The implementation of the Public Health Control of Smoking Products Act 2024 will likely set the stage for further regulatory developments, addressing emerging challenges and opportunities in the e-cigarette market.


    What is the total tax revenue collected from e-cigarettes in Malaysia from 2021 to 2024?

    The Malaysian government collected approximately 141.1 million ringgit ($30.01 million) in tax revenue from e-cigarette products during this period.

    What are the key components of the new Public Health Control of Smoking Products Act 2024?

    The Act includes regulations for the production, sale, and advertising of e-cigarette products, aiming to create a comprehensive and effective regulatory framework.

    How will the collected tax revenue be used?

    The tax revenue will be channeled into the government’s consolidated fund, supporting various national development projects.

    What are the expected benefits of the new e-cigarette regulations?

    The regulations are expected to improve public health by reducing the use of harmful e-cigarette products and ensuring market fairness and safety.

    How does Malaysia’s regulatory approach compare to other countries?

    Malaysia’s approach is similar to those of the United States and European Union countries, which have stringent regulations to control the e-cigarette market.