How much potential government revenue is estimated from taxing vape liquids?

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Potential Government Revenue from Vape Liquid Taxation Estimated at RM2 Billion

The Malaysian government anticipates a potential revenue of RM2 billion from the imposition of excise duty on vape liquids containing nicotine. This projection was a key component of the Budget 2023 announcement, signalling a new revenue stream for the nation. The implementation of this tax is expected to enhance regulatory compliance and curb financial leakages within the industry.
Registration Deadline for Industry Players

Manufacturers and stakeholders in the vape industry are required to register with the Customs Department by the end of April. This mandatory registration period, running from April 1 to April 30, is designed to ensure full compliance as tax collection commences in May. Early registration aims to prevent businesses from facing penalties for late submission.
Tax Rate and Implementation Details

The excise duty has been set at 40 sen per millilitre for vape liquids or gels containing nicotine. This measure was officially gazetted, bringing these products under the purview of excise tax regulations. The Finance Ministry stated that this move is part of a broader commitment to improve the enforcement of regulations on controlled goods and prevent revenue loss.
Allocation of Projected Revenue

A significant portion of the revenue generated from this new excise duty is earmarked for the Health Ministry. Prime Minister Datuk Seri Anwar Ibrahim, who also serves as Finance Minister, indicated during the Budget 2023 tabling that half of the estimated RM2 billion in potential revenue will be allocated to support health initiatives. This allocation underscores the government's focus on public health alongside revenue generation.

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How much potential government revenue is estimated from taxing vape liquids?

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