Malaysia Imposes Excise Duty on Vape Liquids with Nicotine Content

Starting tomorrow(04/01/2023), vape liquids with nicotine content will be taxed at 40 sen per millilitre in Malaysia, according to a federal government gazette notice released today. The new excise duty is part of the government’s effort to tax liquid or gel products containing nicotine.

Prime Minister Datuk Seri Anwar Ibrahim announced the imposition of an excise duty on liquid or gel products containing nicotine during the tabling of Budget 2023 on February 24. Half of the revenue generated from the tax will be allocated to the Health Ministry.

The previous government had planned to expand tax collection on vape liquids containing nicotine under Budget 2022, imposing excise taxes at RM1.20 per millilitre. However, enforcement was postponed.

According to a study by tobacco firm JTI Malaysia, the government missed out on an opportunity to collect RM866 million in taxes last year from liquids used for vaping or electronic cigarettes.

The Health Ministry has committed to speeding up the tabling of the Tobacco Control Bill in Parliament in light of the new taxation on liquid nicotine.

However, two associations representing healthcare professionals in Malaysia have voiced their opposition to the government’s move to exempt nicotine as a controlled substance under the law ahead of the new taxation against vape products.

Overall, the new excise duty on vape liquids with nicotine content is expected to generate significant revenue for the government, while also regulating the sale and use of vape products in Malaysia.