By Tengku Aslahuddin Ja’afar Tengku Azlan
DO you know that Malaysia has the opportunity to gain an estimated tax revenue of over RM300 mil through regulation of the e-cigarette industry?
The Government has announced the implementation of excise tax on vape devices and e-liquids earlier this year, however, this is only collecting a fraction from the booming e-cigarette industry.
According to statistics reported by the Retail and Trade Brands Advocacy Malaysia (RTBA Malaysia), vape e-liquids with nicotine are an option to consider for new sources of revenue stream as 97% of the e-cigarette market are those containing nicotine.
However, they are not captured in the new tax regulation as nicotine e-liquids are currently illegal and are served by the underground economy entirely.
The Ministry of Health has reported that there are over one million vape users in Malaysia. Despite this large group of vape consumers, there is no proper regulation and legislation of nicotine e-cigarettes which has brought concern towards the safety of the citizens.
Based on a recent opinion poll, 76% of Malaysians agree that the economy would benefit from the regulation of e-cigarette products.
Therefore, it is important to drive awareness on the importance of e-cigarette legislation and regulation among consumers, as this would lead vapers and smokers looking to quit the habit to be more informed about the potential benefits of switching to vaping and potentially quit the habit altogether.
Setting a regulatory framework on e-cigarette will help the citizens to make an informed decision regarding the available alternative to combustible cigarettes, bringing the nation one step closer to be ‘smoke-free’.
Furthermore, insights from the same opinion poll state that 87% agrees that tax should be imposed on vaping products and 74% believes that the revenue collected could be spent to help the nation’s growth on areas of importance such as education and economy.
Hence, the Government will be able to maximise revenue collection while ensuring the consumers are using regulated products.
According to a market analysis report by Grand View Research, the global e-cigarette market size is estimated to reach RM272.54 bil by 2027. Malaysia’s e-cigarette industry is currently valued at RM2.27 bil.
The prevalence of the well-established e-cigarette ecosystem is an attractive prospect towards foreign direct investment, giving Malaysia an upper hand in attracting global investors and multinational companies. Closer to the citizens, regulation of the e-cigarette industry will potentially contribute to creating more job opportunities. Thus, this will be beneficial towards the Bumiputeras as most of them are vape shop owners.
As the e-cigarette industry is a growing market with local population demand, there is a need for the Malaysian government to expand the legislation purview to include nicotine vapes in upcoming legislation.
With practical and comprehensive regulation, the vaping industry in Malaysia has the potential to spur economic growth as there is an established ecosystem of manufacturers, importers and retailers, with a growing distribution and logistics network on a local level. – May 6, 2021
Tengku Aslahuddin Ja’afar Tengku Azlan is the president of Vape Consumer Association of Malaysia.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
Photo credit: Getty Images
