KUALA LUMPUR – With the Malaysian vape industry valued at RM2.27 billion, its players are urging the government to implement an excise duty on e-liquids with nicotine to maximise tax revenue from these businesses.
In a joint statement, Malaysian Vape Industry Advocacy (MVIA) and Malaysian Vape Chamber of Commerce (MVCC) said Customs Department information showed that excise collection for e-cigarettes amounted to less than RM100,000 in the first quarter of 2021.
This is much lower than the RM300 million estimated by MVCC for the period.
“Previously, MVCC estimated that the government would be able to collect tax revenue amounting to RM300 million if the excise duty imposed on the vape industry covered products containing e-liquids with nicotine.
“However, currently, the government imposes a 0% excise tax on vape devices and 40 sen on each ml of non-nicotine e-liquids, effective January 1, 2021.”
Given that there are about 1.12 million vape users in Malaysia, based on Health Ministry information, the low tax collection is because only vape devices and e-liquids without nicotine – making up just 3% of the e-cigarette market – are taxed.
With the industry having grown rapidly, said the statement, if the government implements the suggested tax, it can be one of the main contributors to the national economy.
Although the vape industry does not receive much attention from the government, the fact is that the industry is currently valued at RM2.27 billion and has the capability to garner tax revenue for the country if a taxation framework is implemented properly.
“Industry players are also of the opinion that the implementation of an excise duty for e-liquids with nicotine, as well as regulations for the vape industry, can improve the overall industry ecosystem and benefit all.”
Contacted by The Vibes, MVIA said the tax should be broadened to include e-liquids with nicotine as this will help generate revenue for the government.
Also, the move will see the items being regulated.
“The implementation of a broadened taxation framework, which includes e-liquids containing nicotine, will not only spur and generate economic activities for the vape industry, but also maximise revenue collection for the government and ensure consumers are using regulated products in Malaysia,” said MVIA. – The Vibes, June 24, 2021
