KUALA LUMPUR (Oct 10): Malaysia will raise taxes on tobacco and alcohol products effective Nov 1 as part of its renewed public health strategy.
The excise duty on cigarettes will rise by two sen per stick, Prime Minister Datuk Seri Anwar Ibrahim announced on Friday during the tabling of Budget 2026. Cigars, cheroots, and cigarillos will see a hike of RM40 per kilogramme while heated products will be levied an additional RM20 per kilogramme of tobacco content.
To help smokers quit, the government will extend the exemption period for import duty and sales tax on nicotine replacement therapy products until Dec 31, 2027. The exemption will now include nicotine mist and nicotine lozenges, broadening access to smoking cessation tools.
Malaysia already has one of the highest taxes on tobacco in Southeast Asia, on top of other regulatory measures such as a ban on smoking indoors and in public places, such as restaurants and government buildings.
Any sales of alcoholic products in Malaysia will have to contend with strict laws and regulations, including a ban on Muslim from consuming or buying the intoxicants. Malaysia also has one of the world's highest excise duties on beers.
However, the excise duty on alcoholic beverages will be increased by 10%, also effective Nov 1.
Additional revenue from cigarettes and alcohol will be distributed to the Health Ministry, including for treatment of diabetes and heart diseases, Anwar added.
Malaysia last increased alcohol tax in 2016 when duties on locally-produced hard liquor rose by 150%, and beer and stout duties were rebased to RM175 per litre of alcohol — then the second-highest rate globally. Excise duties on cigarettes, meanwhile, have remained unchanged since 2015.