Excise duty on vape liquids the way forward, says industry player

An excise duty of RM1.20 per millilitre (ml) of nicotine vape liquid will be imposed from next year.

PETALING JAYA: The government’s move to impose excise duty on vape liquids from next year will help in regulating the RM2 billion industry, says a homegrown industry player.

Nanostix Innovations Sdn Bhd executive director Shahabudeen Jalil welcomed the proposal by finance minister Tengku Zafrul Aziz when tabling Budget 2022 recently, saying the new excise duty ultimately benefits consumers.

“To pay the excise duty, we will also need to reveal every ingredient used in the production of the liquid to relevant authorities. Nanostix uses a closed pod system, which prevents the addition of any illegal chemical or substance, so this ensures transparency and safety for customers,” he told FMT.

“The taxation framework for vape products is a good way of regulating the industry, allowing players to be competitive and structured. It has already been implemented in Indonesia and across Europe.”

Shahabudeen Jalil.

In January this year, the government imposed a 10% excise duty on all electronic cigarettes and other smoking devices, including vapes.

Under Budget 2022, an excise duty of RM1.20 per millilitre (ml) of nicotine vape liquid will be imposed as well.

Nanostix, which has expanded overseas with a presence in the UK, Australia, Russia, and Indonesia, among others, has been championing excise duties for vape liquids since 2015.

The excise duties mean Nanostix, like other vape industry players, will incur higher costs.

“The announcement by the government is good news, despite the increase in cost for us. We do, however, plan to absorb half that cost so it does not burden our customers,” he said.

In recent years, there have been growing calls for the regulation of the vape industry for the protection of consumers and to unlock new revenue streams and economic opportunities for both the authorities and entrepreneurs.- FMT