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Malaysia Commerce Group: Vape Tax Rate Should be Different Than Tobacco Tax

The Malaysian Vape Chamber of Commerce (MVCC) says that the existing high vape tax rate, should be reviewed and differentiated from the tax on tobacco cigarettes.

Diane Caruana

August 2, 2022

Sensible vape regulations would have a positive effect on the local economy by creating more jobs and attracting foreign direct investment.

The local government has recently announced a vape tax increase of 200% implemented at RM1.20 per millilitre (ml) for both nicotine and non-nicotine e-liquids. Most industry players, especially manufacturers, feel that the tax is too high and will hit them hard. This will in turn have a negative impact on consumers as prices will have to raised.

“Manufacturers have no choice but to increase the price of their products as the tax rate imposed is equivalent to the current retail price of vape products. For example, each 30ml bottle of e-liquid will be taxed at RM36. With this rate, the estimated retail price of vape e-liquids will reach twice the current price per 30ml bottle, explained MVCC head of information Ashraf Rozali.”

He added that while the industry supports sensible vape regulations, these should differentiate it from tobacco products. Moreover, he added, industry stakeholders including manufacturers, retailers, and end-users, must speak up and be involved in the process.

“It is time for the members of the industry, including manufacturers and consumers, to show their support and participate in our efforts to advocate for the vape industry, especially in initiatives that support taxation and regulations.We know that many individuals are hesitant about voicing their support for the industry, but we must acknowledge the impact of this industry, which comprises thousands of Bumiputera entrepreneurs and generates millions of ringgit a year. It is time for us to come forward and not hide behind the scenes,” said Rozali.

The “Malaysian Insights & Perspectives on Vape” report

Data from a 2021 has indicated that 80% of Malaysians, are in favour of having the local vape industry regulated by authorities. Earlier in the year, the Malaysian Vape Chamber of Commerce (MVCC) had called onto the Malaysian government to set in place appropriate regulations on nicotine-containing e-liquids. He said that amongst other things, this move would have a positive effect on the local economy by creating more jobs and attracting foreign direct investment (FDI).

“The findings show that there are more than 3,300 businesses related directly to the vape industry, with a workforce of more than 15,000 workers,” said the MVCC on launching its Malaysian Vaping Industry report.

MVCC president Syed Azaudin Syed Ahmad, said that the report findings show that the sector is a viable and growing industry in Malaysia, and that it has facilitated the growth of local entrepreneurs. “In addition, the Malaysian vape industry currently has an established ecosystem comprising manufacturers, importers and retailers, and a growing distribution and logistics network,” he said.

And the “Malaysian Insights & Perspectives on Vape” report highlighted that the public was of the same opinion. Commissioned by the Malaysian Vape Industry Advocacy (MVIA) the survey indicated that 76% of the respondents agree that vape regulations would be beneficial to the local economy.

Read Further: New Strait Times