Malaysia Postpones Start of Controversial E-Liquid Tax

Photo: Holger

The government of Malaysia has postponed implementation of a new tax on e-liquids following complaints from vapor companies and consumers, according to The Malaysia Reserve.

The proposal called for a duty of MYR1.20 ($0.29) per ml of vape liquid or gel, which could have more than doubled the retail prices of bottles for open-systems.

“We are not surprised by this deferment, considering the blowback from vape industry players and consumers over the high duty rate,” said CGS-CIMB Securities analyst Kamarul Anwar.

Vapor companies said the tax would make e-cigarettes more expensive than tobacco cigarettes and force the industry to compete with much-less expensive black market products.

“The tax rates implemented should be made with proportional risks of the product benefits to the hardcore smoking community,” Malaysian Vape Industry Advocacy President Rizani Zakaria told The New Straits Times in October.

The proposal also ran into opposition from medical groups. “The taxation levels for tobacco harm reduction products in Malaysia must remain risk-proportionate, benchmarked against high-risk products such as cigarettes,” Federation of Private Medical Practitioners Associations Malaysia president Steven Chow said in a statement last November.

Malaysia currently prohibits nicotine sales for non-medical purposes. Earlier this year, Health Minister Khairy Jamaluddin informed the World Health Organization that the country would legalize and regulate vaping products to prevent youth access.