KUALA LUMPUR, July 10 — The federal government has collected RM141.1 million in vape liquid tax revenue from 2021 to 2024, comprising RM82.51 million from non-nicotine vape liquid and RM58.55 million from vape liquid containing nicotine.
All electronic and non-electronic cigarettes, including vape, are subject to a 10 per cent ad-valorem excise duty since January 1, 2021. Liquid or gel with nicotine for these products is charged an additional excise duty of 40 cents per millilitre, effective from May 1, 2023.
The vape liquid tax revenue, however, is not earmarked for health, but will be deposited into the federal consolidated fund, Prime Minister Anwar Ibrahim, who is also Finance Minister, told Tasek Gelugor MP Wan Saiful Wan Jan in a written Dewan Rakyat reply yesterday.
“With regards to the redistribution mechanism of vape liquid tax collections, under Article 97(1) of the Federal Constitution, all revenues and funds acquired by the Federation, regardless of their source, shall be paid into the Federal Consolidated Fund.
“Therefore, government revenues from various taxes, including vape liquid taxes, must be accounted for in the Federal Consolidated Fund.
“Any disbursements from this fund to finance administrative and developmental expenditures, including health care programmes and projects, must follow the national annual budget preparation process,” Anwar told Wan Saiful, who inquired about the amount collected from vape liquid taxes and the redistribution mechanism for health care purposes.
During the tabling of Budget 2023 in February last year, Anwar said that the government had agreed to allocate “half of the revenue” from excise duties on vape liquids containing nicotine for the Ministry of Health (MOH) for “efforts to improve the quality of health services” and conducting “effective anti-smoking and anti-drinking campaigns”.
Electronic cigarettes and vape products remain unregulated, pending approval of the regulations and orders under the Control of Smoking Products for Public Health Act 2024 (Act 852). The Act, which has been gazetted on January 2, 2024, will be enforced simultaneously with the enforcement of the regulations.
Health Minister Dzulkefly Ahmad posted on X last week that the MOH is awaiting the endorsement of regulations and orders by the Attorney General’s Chambers (AGC), which has delayed the implementation of the Control of Smoking Products for Public Health Act.
“Five regulations (registration, sales, packaging, and labelling) and one pertains to ‘order’ i.e. banning of smoking in all public places, all shall simultaneously be enforced with Act 852 (including e-cigarettes).
“Regulations endorsed by AGC, with two more plus one order for approval in the pipeline.
“The Regulations and Order shall be enforced together with the Act 852 in August 2024 when everything shall be in order, insya Allah. God willing, no more delays,” Dzulkefly said.
CodeBlue editor-in-chief Boo Su-Lyn today posted a picture on X of a vape vending machine at a mall in Kuala Lumpur. She highlighted that the vending machine, which sells disposable nicotine vapes, does not mandate scanning of an identification card for age verification before purchase.
The government removed liquid nicotine, used in electronic cigarettes and vape, from the Poisons List of controlled substances on March 31 last year to enable taxation on e-liquids.
