KUALA LUMPUR, Oct 10 — The government has proposed an increase in excise duties on tobacco products and alcoholic beverages in Budget 2026, with the additional revenue to be earmarked for health spending.
Finance Minister Anwar Ibrahim, who is also the prime minister, said the raise in excise duties on tobacco products will take effect on November 1 this year:
- Cigarettes: an increase of 2 sen a stick.
- Cigars, cheroots, and cigarillos: an increase of RM40 per kg.
- Heated tobacco products: an increase of RM20 per kg of tobacco content.
“To reduce access to alcoholic drinks and to encourage a healthier lifestyle, the government has agreed to raise the excise duty rate on alcoholic beverages by 10 per cent, starting November 1, 2025,” said Anwar when tabling Budget 2026 in Parliament.
“The additional revenue from cigarettes and alcohol will be distributed to the Ministry of Health (MOH), including for MOH’s Healthy Lung Initiative and treatment for diabetes and heart disease.”
Anwar added that the government has also lengthened the period for import duty and sales tax exemptions for nicotine replacement therapies, besides expanding these exemptions to nicotine mist and nicotine lozenges, until December 31, 2027.
Budget 2026 also proposes expanding vaccination expenditure eligible for individual income tax exemptions to cover all vaccines registered and approved by MOH.
