POTENTIAL RM300M TAX REVENUE FROM VAPE INDUSTRY

Expand framework to include e-liquid with nicotine, says retail advocacy group

THE government stands to gain a tax revenue of more than RM300 million if appropriate vape regulations are introduced, said Retail and Trade Brands Advocacy (RTBA) Malaysia Chapter.

RTBA is a non-governmental organisation (NGO) advocating effective regulatory, financial and taxation policies affecting retailers and brands.

Managing director Datuk Fazli Nordin said Malaysia had an opportunity to expand its revenue stream in this growing market.

He said there was potential revenue of more than RM300 million should the taxation framework include vape e-liquid with nicotine.

“The vape market is long established in Malaysia and there are already more than one million consumers using the products. This is an untapped sector that the government can immediately gain revenue this year by expanding the taxation framework.”

RTBA said the government had made the right step in imposing excise tax on vape products in the 2021 Budget.

However, it said the taxation framework only covered vape devices and non-nicotine vape e-liquid, which made up less than five per cent of the market.

“Therefore, the tax framework needs to be expanded to include vape e-liquid with nicotine.”

The NGO believes the expanded taxation framework needs to be complemented with regulations on vape products as this will spur economic activities in this industry.

Based on a report published by the Malaysian Vape Chambers of Commerce, the vape industry was valued at RM2.27 billion.

The data is based on the consumer consumption pattern, especially e-liquid with nicotine which forms the largest component of the collectible taxes for the government, and estimated monthly sales figures derived from 3,000 vape retailers.