The local government recently announced a 200% increase in taxes on electronic cigarettes, with a raise of 1.20 Malaysian Ringgit per milliliter (ml) for both nicotine and non-nicotine e-liquids. Most industry players, particularly manufacturers, feel the tax is too high and will have a significant impact on their businesses. This, in turn, will negatively affect consumers as prices will inevitably increase.
Manufacturers have no other choice but to increase product prices due to the imposed tax rates which are equivalent to the current retail prices of electronic cigarettes. For example, a 30ml bottle of e-liquid will be taxed at RM36. According to Ashraf Rozali, spokesperson for MVCC, at this rate, the estimated retail price for vape e-liquids will double the current price per 30ml bottle. He added that while the industry supports reasonable regulations for e-cigarettes, these regulations should differentiate it from tobacco products. Additionally, industry stakeholders including manufacturers, retailers, and end-users must speak up and participate in this process.
It is time for industry members, including manufacturers and consumers, to express their support and participate in our efforts to advocate for the electronic cigarette industry, particularly in supporting tax and regulatory measures. We know that many people hesitate to speak out in support of this industry, but we must acknowledge its impact. This industry is composed of thousands of indigenous entrepreneurs who generate millions of ringgit annually. Now is the time for us to stand up, not hide behind the scenes," said Rozali.
Data from 2021 indicates that 80% of Malaysians support government regulation of the local e-cigarette industry. Earlier this year, the Malaysian Vape Chamber of Commerce (MVCC) called for appropriate regulations on nicotine-containing e-liquids by the government. The MVCC stated that this would positively impact the local economy by creating more employment opportunities and attracting foreign direct investment (FDI), among other benefits. "Survey results show that there are over 3,300 businesses directly related to the e-cigarette industry, employing more than 15,000 people," the MVCC stated in its report on the Malaysian e-cigarette industry.
According to Syed Azaudin Syed Ahmad, the President of MVCC, the report shows that the electronic cigarette industry is a feasible and continuously growing industry in Malaysia, which promotes the growth of local entrepreneurs. "In addition, the electronic cigarette industry in Malaysia currently has a mature ecosystem consisting of manufacturers, importers, and retailers, as well as a growing distribution and logistics network," he said. "The report on Malaysia's perception and views on Vape emphasizes public opinion." A survey commissioned by the Malaysian Vape Industry Advocacy Organization (MVIA) shows that 76% of respondents agree that electronic cigarette regulations would benefit the local economy.
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