This article first appeared in The Edge Malaysia Weekly on April 3, 2023 - April 9, 2023

THE government has finally set in motion its plan to regulate the vape industry, which is estimated to be worth RM2.7 billion. Last Friday, the Ministry of Health (MoH) ordered the removal of liquids or gel that contain nicotine that are used in electronic cigarettes (e-cigarettes) and vape products from the list of controlled substances scheduled under the Poisons Act 1952.

The previous day, Health Minister Dr Zaliha Mustafa told the Dewan Rakyat that the move was to pave the way for the government to impose excise duty on nicotine-based liquids or gel, which was proposed under the revised Budget 2023. The order was posted on the Malaysia Federal Legislation portal on Friday.

On the same portal, the government made an amendment to the Excise Duties Order 2022, which comes into effect on April 1. The amendment involves the imposition of an excise duty of 40 sen per millilitre (ml) on e-cigarette or vape liquids and gel containing nicotine. This is lower than the excise duty of RM1.20 per ml proposed under Budget 2022.

In February, during the retabling of Budget 2023, Prime Minister Datuk Seri Anwar Ibrahim announced that the government planned to impose excise duty on e-cigarette or vape liquids containing nicotine. Anwar, who is also finance minister, said half of the vape-related tax revenue would go to MoH to aid its efforts in improving the quality of health services and for effective anti-smoking and anti-drinking campaigns.

In August last year, JT International Bhd estimated that the government loses about RM750 million a year from uncollected vape excise duties based on the 626 million ml of vape liquids consumed in 2020, which cost between 50 sen and RM4.80 per ml.

Vape players have spent years calling for the government to regulate the industry. The illicit vape industry has flourished in Malaysia, gaining a 42% share of the total tobacco market — surpassing that of illicit cigarettes (37%) and legal cigarettes (21%) — a study by the Malaysian Vape Chamber of Commerce in December 2020 revealed.

Vape players, such as the Malaysian Vapers Alliance (MVA), have said regulating vape products containing nicotine under the Poisons Act does not help as it is not a suitable framework and does not work for the products.

“Despite the prohibition under the Poisons Act, vape products are sold without any controls. Therefore, the exemption of vape liquids from nicotine under the Poisons Act is necessary for the government to implement a holistic regulatory framework to regulate vape liquids containing nicotine,” MVA president Khairil Azizi Khairuddin said in a March 29 statement.

Over the past month, talk has been rife of liquids or gel containing nicotine being exempted from the Poisons List. However, consumer and vape groups were split on the move.

Consumer groups like the Consumers’ Association of Penang (CAP) had raised concerns that if nicotine-based liquids or gel were to be taken off the Poisons Act and not governed under any law, the products could fall into the hands of minors. Thus, CAP called on the government to quickly table and approve the Control of Tobacco Product and Smoking Bill 2022, which was tabled for first reading in July 2022 by former health minister Khairy Jamaluddin but was stalled in the 14th parliament.

E-cigarettes and vape products are still unregulated today, pending the tabling of the bill. The bill, however, is a controversial one and was previously deemed draconian as it proposed to ban any form of smoking-related products, including cigarettes, tobacco and vape products, to anyone born after a certain year, known as the generational end game (GEG).

It was reported that before the 14th parliament was dissolved in October last year, the Dewan Rakyat special select committee on the tobacco control bill had suggested several revisions to the bill, including to drop personal possession of tobacco and vape products by anyone born from 2007 as an offence. As we have a new parliament, the bill will have to be retabled.

Expressing full support for the GEG, Zaliha was reported as saying last Thursday that her ministry was expediting the bill to be tabled in parliament “if not this session [which ends on April 4], then next session”. The next parliamentary sitting is from May 22 to June 15.

While the tabling of the Control of Tobacco Product and Smoking Bill 2022 would have brought much cheer to vape players, which for years have been calling for the government to regulate their industry, they are against the GEG proposal as it treats vape products in the same way as cigarettes and tobacco, and would impact the vape industry. They want Malaysia to follow New Zealand’s version of GEG, which does not prohibit the sale of vape and tobacco heating products to future generations as they are deemed less harmful than traditional cigarettes.

Rather than waiting for the bill to be tabled, vape players are now recommending that the government make use of the existing Control of Tobacco Product Regulations 2004 to regulate the nicotine-based liquid or gel products. 

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