Malaysian Vape Manufacturers Must Register by End of April to Avoid Fines and Excise Tax

Malaysia has recently announced that local manufacturers producing e-liquid or gel products containing nicotine must register their manufacturing activities with the Customs Department by April 30, 2023. The move comes after the removal of nicotine e-liquid or gel from the Poisons Act 1952, allowing for e-cigarettes and vaping products to be taxed in the country. The Ministry of Finance (MOF) has said that early registration within the prescribed period may prevent manufacturers from being charged a compound for the offense of late registration. Furthermore, this early registration will ensure comprehensive industry compliance and smooth tax collection by May 2023.

Excise Tax on Nicotine E-liquids or Gels

The imposition of an excise tax of 40 sen ($0.004) per milliliter on nicotine e-liquids or gels has been put in place. The Prime 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 MOF said that the new excise duty 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 customs to avoid leakage of national income, according to media reports.

Proposed Tax Collection

The previous government under Datuk Seri Ismail Sabri Yaakob's administration 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 milliliter. However, the plan was postponed because nicotine vape liquid was still classified as a Class C poison under the Poisons Act.

The Need for Registration

Malaysian vape manufacturers must register by the end of April to ensure industry compliance and smooth tax collection by May 2023. The MOF's statement emphasizes the importance of early registration to prevent manufacturers from being charged a compound for late registration. This move is in line with the government's plan to tax the vape industry and discourage the use of vapes.

What Happens If You Don't Register?

Failure to register with the Customs Department by the end of April will result in manufacturers being charged a compound for late registration. This means that they will have to pay a fine for not complying with the registration requirements. Therefore, it is essential for local manufacturers producing e-liquid or gel products containing nicotine to register as soon as possible to avoid any penalties.

The Benefits of Registration

Early registration within the prescribed period will ensure comprehensive industry compliance and smooth tax collection by May 2023. It will also help prevent manufacturers from being charged a compound for late registration, which could result in hefty fines. Furthermore, registration will 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.

Conclusion

Malaysia has taken a significant step in regulating the vape industry by requiring local manufacturers to register their manufacturing activities with the Customs Department by April 30, 2023. This move is in line with the government's plan to tax the vape industry and discourage the use of vapes. Failure to register may result in manufacturers being charged a compound for late registration, so it is essential to comply with the registration requirements as soon as possible.

FAQs:

1. What is the deadline for Malaysian vape manufacturers to register with the Customs Department?
   A: Malaysian vape manufacturers must register with the Customs Department by April 30, 2023.
2. Why do Malaysian vape manufacturers need to register?
   A: Malaysian vape manufacturers need to register to ensure industry compliance and smooth tax collection by May 2023. Failure to register may result in manufacturers being charged a compound for late registration.
3. What happens if Malaysian vape manufacturers do not register by the deadline?
   A: If Malaysian vape manufacturers do not register with the Customs Department by the deadline, they will be charged a compound for late registration.
4. Why did the previous government postpone the plan to tax liquid or gel products containing nicotine for vapes and e-cigarettes?
   A: The previous government postponed the plan to tax liquid or gel products containing nicotine for vapes and e-cigarettes because nicotine vape liquid was still classified as a Class C poison under the Poisons Act.
5. What is the excise tax on nicotine e-liquids or gels in Malaysia?
   A: The excise tax on nicotine e-liquids or gels in Malaysia is 40 sen ($0.004) per milliliter.