Vapers pay lower taxes than smokers: Study

KUALA LUMPUR: The taxes imposed on vape products are lower than that is levied on tobacco products.

According to a local research and technology company, the proposed tax value for the vape industry is much lower than the tax imposed on the tobacco industry.

MQ Consultant, which engages in indepth study of the vape economy and industry in Malaysia, said this is despite the fact that the vape market has a high revenue potential.

Taxation on the vape industry was among the many highlights in Budget 2021 that was passed at the policy stage in the Dewan Rakyat last Thursday.

As announced during the tabling of the Budget, the government proposed to impose a 10% ad valorem excise on all electronic and non-electronic smoking devices, as well as a 40 sen per millilitre excise duty for e-cigarette and vaping liquids with or without nicotine, beginning from Jan 1.

“However, the vaping industry is taxed much lower than the tobacco industry despite its high revenue potential. There is an increasing number of smokers in the world today choosing to vape,” said MQ Consultant, adding the majority of other countries imposed a much higher tax than Malaysia.

It also said that with the help of data and research that is actively being compiled locally and internationally, the government could use vaping as an option to encourage a possible smoke-free society.

“This effort is not an experimental idea as it has been adopted by the New Zealand government as a way to achieve its goal to become a smoke-free nation by 2025,” MQ Consultant said.

“With a tax regulation in place, Malaysia can finally design a win-win situation that will not only contribute to the country’s economy but also benefit government efforts in improving Malaysia’s social and health status in the long term.”

An independent survey estimated that there are three million e-cigarette users in Malaysia currently.