Key point:
·Tax revenue from tobacco products in Malaysia has significantly increased in the past few years, contributing over 15.3 billion ringgit (approximately 3.3 billion USD) from 2021 to 2025.
·Since 2021, revenue from e-cigarette taxes has surpassed traditional cigarettes for the first time.
·A new tax system for e-liquid will be implemented starting in May 2023.
·The government has increased national fiscal revenue through multiple tax policies.
According to a report by The Star on August 26th, the Malaysian Ministry of Finance stated that from January 2021 to July 2025, the consumption tax on tobacco products has generated a revenue of 15.3 billion Ringgit (approximately 3.3 billion US dollars) for the government.
During this period, the total tax revenue from e-cigarette devices containing or not containing nicotine, e-liquids or gel products, amounted to 28.845 million Ringgit (approximately 6.14 million USD). In comparison, the tax revenue from traditional cigarettes was 15.02 billion Ringgit (approximately 3.2 billion USD).
Overall, from 2021 to July 2025, the overall tax revenue for these two product categories amounted to RM 15.3 billion. According to regulations, cigarettes, tobacco products, as well as e-cigarette devices and e-liquid, are not only subject to consumption tax but also require payment of sales tax and import tax upon importation.
Originally, a consumption tax of 0.40 Malaysian Ringgit (approximately 0.095 US dollars) per milliliter was imposed on e-liquids or gels for e-cigarettes that did not contain nicotine. In addition, starting from January 1, 2021, all types of electronic and non-electronic cigarette devices, including e-cigarettes, are subject to a 10% ad valorem tax rate.
Starting from May 1, 2023, the scope of the consumption tax will be expanded to include e-liquids and gels used in e-cigarettes that contain nicotine, with a tax rate of 0.40 Malaysian Ringgit per milliliter.
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