Galen Centre Disappointed With Government’s Broken Promise To Earmark Vape Tax Revenue For Health

The Galen Centre is disappointed that the government broke its promise to earmark half of vape liquid tax revenue for health, with all the funds going to the Federal Consolidated Fund instead. The earmarking was pledged in exchange for not banning vape.

KUALA LUMPUR, July 11 — The Galen Centre for Health and Social Policy expressed shock and disappointment today with the government’s broken pledge to earmark tax revenue on vape liquids for health initiatives.

The health think tank pointed out that Finance Minister Anwar Ibrahim, who is also the prime minister, had said in his Budget 2023 speech in February last year that half of the revenue collected from taxes on e-cigarette liquids would be earmarked for health.

Yet, the finance minister told Tasek Gelugor MP Wan Saiful Wan Jan in a written parliamentary reply last Tuesday that the RM141.1 million revenue collected from 2021 to 2024 from taxation on vape liquids with and without nicotine would be deposited into the Federal Consolidated Fund.

“This move is in direct contradiction with one of the supporting arguments used to justify and enact the tax, and breaks one of the promises made during the Finance Minister’s budget speech on 24 February 2023,” Galen Centre chief executive Azrul Mohd Khalib said in a statement.

“In that speech, he pledged to earmark half of the revenue collected to be used for health. This money is intended to complement existing allocations given to the Ministry of Health, especially in the area of health education and promotion which is severely underfunded.”

The Galen Centre pointed out that an earmarked 50 per cent of vape liquid tax revenue could help government and non-governmental organisations (NGOs) working in public health to deal with the consequences of unrestricted and unprohibited marketing and sales of disposable nicotine vape devices, including through vending machines. 

“Half of RM141.1 million is RM70 million more funds which could help repair the damage of having nicotine vape completely deregulated for more than a year. This was how the government justified to public health experts, advocates, and anti-cancer groups on the need to remove nicotine vape from the scheduled list [under the Poisons Act 1952], introducing regulation, instead of banning them outright,” Azrul said.

CodeBlue editor-in-chief Boo Su-Lyn posted on X yesterday – which has received about 390,000 views and over 6,300 reposts – about a vape vending machine at a shopping centre in Kuala Lumpur that sells nicotine vape disposables without an age verification feature; customers can simply purchase the products via card or e-wallets.

The Ministry of Health (MOH) now appears to have shut the vape vending machine down.

Azrul highlighted the MOH’s 2022 Global Adult Tobacco Survey (GATS) Malaysia that found vaping prevalence surged 600 per cent. Tobacco smoking prevalence only dropped four points to 19 per cent in 2023 from 23.1 per cent in 2011, but dual tobacco and e-cigarette users rose to 3.9 per cent.

“It is obvious that vape does not reduce tobacco smoking, and is now a separate problem needing to be addressed. Alarmingly, the majority of e-cigarette users are now aged 15 to 24 years,” he said.

“This is what public health advocates predicted would happen if the government proceeded with deregulation, and it is now a reality.”

Health Minister Dzulkefly Ahmad’s predecessor, Dr Zaliha Mustafa, signed an order on March 31, 2023, to remove vape and e-cigarette liquids with nicotine from the Poisons List of controlled substances under the Poisons Act 1952 in a veto of the Poisons Board’s unanimous rejection of this move. 

Although Parliament passed the Control of Smoking Products for Public Health Act 2024 (Act 852) in December 2023, the Act has yet to be enforced as the regulations have yet to be prescribed by the health minister.

Dzulkefly previously announced that the Act would come into force in June, but he has since announced a delay in the Act 852 regulations to August, saying that the Attorney-General’s Chambers has approved three regulations while another two regulations and a minister’s order are pending approval.

“In light of last year’s detrimental decision to remove liquid nicotine used for vape and e-cigarettes from the scheduled substances under the Poisons Act without having an alternative regulation already in place, nicotine vape and e-cigarettes became totally unregulated resulting in sales, distribution and marketing of these products being unrestricted and unprohibited,” Azrul said.

“It was to such an extent that even children and adolescents could freely purchase and use such cheap and widely available products containing nicotine to vape. It was and continues to not be illegal for retailers to sell them to children. 

“We have seen a dramatic increase in the number of individuals who vape and are underaged.”

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