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E-cigarette tax rate should be different from tobacco tax, from Malaysian Commerce Group

2022/08/02|Industry news

The local government recently announced a 200% e-cigarette tax on nicotine and non-nicotine e-liquids at RM1.20 per ml. Most industry players, especially manufacturers, feel the tax is too high and will hit them hard. This will in turn have a negative impact on consumers as prices will have to increase.

“Manufacturers have no choice but to increase the price of their products as the tax levied is equivalent to the current retail price of vaping products. For example, a 30ml bottle of e-liquid will be taxed at RM36,” explains Ashraf Rozali, MVCC’s head of information At this price, it is estimated that the retail price of e-cigarette e-liquid will be double the current price per 30ml bottle.

He added that while the industry supports sound e-cigarette regulations, those regulations should distinguish e-cigarettes from tobacco products. Furthermore, he added, industry stakeholders including manufacturers, retailers and end users must come forward and be involved in the process.

“Now is the time for members of the industry, including manufacturers and consumers, to show support and engage in our efforts to advocate for the vaping industry, especially initiatives that support taxation and regulation. We know that many people express support for the industry There is hesitation, but we must acknowledge the impact of the industry, which is made up of thousands of Bumiputera entrepreneurs and generates millions of ringgit every year. Now is the time for us to stand up, not hide behind the scenes.”

"Insights and Perceptions of Electronic Cigarettes in Malaysia" report

Figures for 2021 show that 80% of Malaysians support government regulation of the local vaping industry. Earlier this year, the Malaysian Vaping Chamber of Commerce (MVCC) called on the Malaysian government to put in place proper regulations for nicotine-containing e-liquids. Among other things, he said, the move would have a positive impact on the local economy by creating more jobs and attracting foreign direct investment (FDI).

"The survey results show that there are more than 3,300 companies directly related to the e-cigarette industry, with more than 15,000 employees," the Malaysian Vaping Association said in its "Malaysian Vape Industry Report".

MVCC chairman Syed Azaudin Syed Ahmad said the report's findings showed that the industry is a viable and growing industry in Malaysia and it has fostered the growth of local entrepreneurs. "Furthermore, Malaysia's e-cigarette industry currently has a mature ecosystem of manufacturers, importers and retailers, as well as a growing distribution and logistics network," he said.

The “Malaysian Insights and Outlook on E-Cigarettes” report emphasizes that the public holds the same view. The survey, commissioned by the Malaysian Vaping Industry Advocacy Group (MVIA), found that 76 percent of respondents agreed that vaping regulations would benefit the local economy.


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