Malaysia imposes a consumption tax of 0.4 Malaysian ringgit per milliliter on e-cigarette liquid containing nicotine. The Malaysian government has removed nicotine from the poisonous list under the Poison Act, which means that nicotine is no longer considered a controlled substance.
This move has cleared the final hurdle for e-cigarette liquid taxation. The tax scheme, which was released on March 29th last year, will impose a consumption tax of 40 cents (0.4 Malaysian ringgit, about 0.6 yuan) per milliliter on e-cigarette liquid containing nicotine, and will be effective from April 1st, according to the government notification released on March 31st.
On April 2nd, the Malaysian Ministry of Finance announced that manufacturers must complete registration with the Customs Department by April 30th to ensure full compliance with taxation starting in May. Half of the revenue from this tax will be allocated to the Ministry of Health. Due to the lack of e-cigarette consumption tax, the Malaysian government has lost an important source of revenue from liquid for e-cigarettes.
The policy towards e-cigarettes in Malaysia is relatively loose, with most regulations missing, no restrictions on the age limit for e-cigarette purchases, no ban on e-cigarette advertisements, promotions, and sponsorships, and no clear regulations on nicotine content. The mainstream nicotine concentration of e-cigarettes in Malaysia is 5% or even higher, far higher than the 2% in the European Union and China.
However, Malaysia is also one of the largest e-cigarette-producing countries in the world, with one-fourth of its population being smokers, and more than 1.4 million people using e-cigarettes.
The low tax rate has amplified this trend, and the country’s policy towards e-cigarettes has mainly been blocked by public health issues.