RETAIL and Trade Brands Advocacy Malaysia Chapter (RTBA Malaysia), a non-governmental organisation advocating for effective regulatory, financial and taxation policies affecting retailers and brand, has urged the Health Ministry (MOH) to tax and regulate nicotine vape products immediately.
RTBA Malaysia made this stance following recent announcement by the Health Minister Khairy Jamaluddin that the tabling of a new law to regulate vape products has been delayed.
This means taxation relating to nicotine vape products cannot be implemented until the said law completes its legislative process later this year.
“While we appreciate and welcome the MOH’s effort in taking the time to develop the right regulations and policy for vape products, this process is taking far too long,” commented RTBA Malaysia’s managing director Datuk Fazli Nordin.
“We must not further delay the move to allow the industry to operate legally and contribute much needed revenue to the Government’s coffers.”
Fazli reiterated that the MOH needs to take steps to regulate the vape industry now. This can be done quickly by issuing a directive or regulations on product ingredients for nicotine vape products especially on the nicotine level allowed by amending the Poisons Act 1952 to enable the taxation on nicotine vaping liquids.
“If the delay is because the new law has yet to be finalised, the MOH should move quickly to amend the Poisons Act 1952 to enable nicotine vape products to be sold and issue a directive or regulations on product ingredients to all industry players on the product,” opined Fazli.
“This is to ensure the industry immediately complies with safety and quality standards especially on the nicotine level and ingredients of vape liquids while also paying taxes for the products.
“With the delay now, not only will consumers continue be buying products that are unregulated, the Government will also lose millions of ringgit in tax collection which is a much needed revenue. Therefore the MOH must not waste any more time on this matter.”
In tabling Budget 2022, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz announced excise duties of RM1.20/mililitre for nicotine-based gel or liquid products for vapes and electronic cigarette.
However, implementation of the excise duty has been postponed indefinitely as the nicotine vape liquids are currently listed as Group C poison under Poisons Act 1952.
The Malaysian vape industry is currently valued at RM2.27 bil. In addition to its potential to contribute significantly to the Government’s revenue in the form of taxes, the industry that is made up of 3,300 small and medium enterprises (SME) also provides jobs to more than 15,000 workers in Malaysia.
In this regard, the ensuing delay in imposing the excise duty will also hinder the growth of this vape industry in Malaysia by leaving thousands of workers uncertain of their future.
“The MOH needs to see this objectively and consider the various implications with the delay. Thousands of workers are uncertain of their future with the industry still operating without clear direction from the Government,” Fazli pointed out.
“Further, consumers are accessing unregulated products and the Government is deprived of much needed tax revenue. All these can be solved with simple solutions.” – March 9, 2022
