Vape Liquid Manufacturers Urged to Register for New Excise Duty in Malaysia
The Malaysian government has recently announced a new excise duty for vape liquids with nicotine content, which has prompted the Finance Ministry to urge all industry players to register themselves with the Customs Department before April 30th. The registration period has been opened from April 1st to ensure comprehensive compliance come tax collection in May.
This move comes as part of the government's efforts to impose an excise duty on liquid or gel products containing nicotine, which was announced during the tabling of Budget 2023 on February 24th by Prime Minister Datuk Seri Anwar Ibrahim. In his announcement, he mentioned that liquid or gel products with nicotine were widely used with electronic cigarettes and vaping, despite this being technically illegal.
The previous government had already planned to expand tax collection to vape liquids containing nicotine by imposing excise taxes at RM1.20 per millilitre under Budget 2022. However, the enforcement was postponed. The new excise duty for vape liquids with nicotine content is set at 40 sen per millilitre and is expected to generate an estimated RM2 billion in potential government revenue.
Early Registration to Prevent Late Registration Compounding
According to the Finance Ministry, the early registration from April 1st to April 30th will prevent manufacturers from being compounded on grounds of late registration. This will ensure comprehensive compliance from industry players come tax collection in May. The licensing registration under the Excise Act 1976 can be done online through the MyExcise System at https://myexcise.customs.gov.my/myexcise/.
The government is committed to ensuring all regulations and controlled goods excise duty will further improve to prevent financial leakages, the statement from the Finance Ministry read.
Health Ministry to Benefit from Vape Liquid Excise Duty
Half of the revenue generated from the new excise duty on liquid or gel products containing nicotine will be allocated to the Health Ministry, as announced by the Prime Minister during the tabling of Budget 2023. The move to impose an excise duty on vape liquids with nicotine is part of the government's efforts to generate more revenue while regulating the use of electronic cigarettes and vaping in the country.
Poisons Act Exemption for Controlled Substance
In order for the government to tax vape liquids with nicotine, the Health Ministry has taken steps to exempt the controlled substance from the Poisons Act. However, this move was met with opposition from two associations representing healthcare professionals in Malaysia before the tabling of the Tobacco Control Bill.
Conclusion
The Malaysian government's move to impose an excise duty on vape liquids with nicotine is aimed at generating revenue while regulating the use of electronic cigarettes and vaping in the country. The Finance Ministry has urged all industry players to register themselves with the Customs Department before April 30th to ensure comprehensive compliance come tax collection in May.
FAQs
- Why is the Malaysian government imposing an excise duty on vape liquids with nicotine?
The move is aimed at generating revenue while regulating the use of electronic cigarettes and vaping in the country.
- When can industry players register themselves with the Customs Department?
The registration period has been opened from April 1st to April 30th.
- What is the expected revenue from the new excise duty on liquid or gel products containing nicotine?
The new excise duty is expected to generate an estimated RM2 billion in potential government revenue.
- How will the revenue generated from the new excise duty on vape liquids with nicotine be allocated?
Half of the revenue generated will be allocated to the Health Ministry.