Following the removal of nicotine e-liquid or gel from the Poisons Act 1952 to allow for e-cigarettes and vaping products to be taxed in Malaysia, local manufacturers producing e-liquid or gel products containing nicotine must register their manufacturing activities with the Customs Department by April 30, according to the Ministry of Finance (MOF).
“Early registration within this prescribed period may prevent manufacturers from being charged a compound for the offense of late registration. This early registration will ensure comprehensive industry compliance and smooth tax collection by May 2023,” the MOF said in a statement on April 2, according to The Edge Markets.
This follows the imposition of an excise tax of 40 sen ($0.004) cents per milliliter on nicotine e-liquids or gels.
rime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced the government’s plan to impose an excise tax on liquid or gel products containing nicotine when he re-tabled Budget 2023 in February.
The previous government under Datuk Seri Ismail Sabri Yaakob’s administration also proposed to extend tax collection from gel or liquid products containing nicotine for vapes and e-cigarettes in the tabling of Budget 2022 by imposing a tax of RM1.20 per ml. However, the plan was postponed, because nicotine vape liquid was still classified as a Class C poison under the Poisons Act.
The new excise duty, the MOF said, would enable the government to tax the vape industry which is estimated to be worth over RM2 billion ($454 million), and at the same time help discourage the use of vapes.
It will also help improve rules and control of excise duty goods by the customs to avoid leakage of national income, according to media reports.