Regulate the vape industry immediately to generate tax revenue

Syed Azaudin Syed Ahmad

ALTHOUGH the vape industry is still unregulated in Malaysia, it still managed to significantly contribute to the local economy by facilitating the growth of local entrepreneurs.

In fact, the Malaysian Vape Chamber of Commerce (MVCC) believe that the industry can create various other multiplier effects for the country, given some appropriate regulations by the Government.

“The vape industry is too substantial to remain unregulated. And based on our data, this industry already has an established ecosystem comprising manufacturers, importers and retailers, along with a growing distribution and logistics network,” said MVCC president.

According to the MVCC’s Study on the Malaysian Vaping Industry report, the country’s vape industry is currently valued at RM2.27 bil and the main workforce comprise of young adults under the ages of 30.

While the Government is already excising tax on vape devices and e-liquids since Jan 1, MVCC suggests for the tax regime to be broadened to include e-liquids with nicotine (which makes up 97% of the Malaysian market) and effectively contribute to the Government’s revenue.

Source: Malaysian Vape Chamber of Commerce

 

“The Malaysian vaping industry has significant potential that can be unlocked with practical and comprehensive regulation that must include the use of e-liquids with nicotine. This will spur the growth of SMEs, which will in turn create jobs and generate tax revenue for the Government,” added Syed Azaudin.

Other key highlights from the report include:

  • There are 1.12 million vapers in Malaysia based on Ministry of Health’s data
  • The ethnic profile of vape users reflect the national race composition – Malay (70%), Chinese (25%), Indians and others (5%);
  • 94% of vape users have a history of smoking cigarettes, and the top reasons given for choosing to vape are as a means to quit smoking cigarettes (57%) and because it is less dangerous as compared to smoking cigarettes (56%);
  • Public Health England, a government health agency in the UK has published expert evidence that finds vape to be 95% less harmful than smoking cigarettes. This is supported by many renowned public health experts and anti-smoking advocates including the Ministry of Health in Canada and New Zealand.

 

Source: Malaysian Vape Chamber of Commerce

 

Meanwhile, a study by the Grand View Research Inc showed that the global e-cigarette and vape market size is expected to reach US$67.31 bil (RM272.54 bil) by 2027, registering a revenue-based compound annual growth rate (CAGR) of 23.8% from 2020. – Feb 4, 2021

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