Dare Vape Ban Will Worsen Malaysia S Illegal Market Propels Black Economy Missed Tax Revenue

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DATAMETRICS Research and Information Sdn Bhd (DARE), a Malaysia-based policy think tank, has warned that proposals for state-level or nationwide vape bans will lead to a rise in the illicit market, erode investor confidence and deprive the government of valuable tax revenue and result in job losses as well.
DARE’s response follows the latest survey released by the Malaysian Vapers Alliance (MVA) – a non-profit advocacy group dedicated to supporting vaping as a tool for smokers to quit – which revealed strong consumer opposition to bans.
The survey found that 74% of respondents fear bans would drive illegal sales while 80% worry about unsafe and unregulated products, thus confirming the real economic risks of prohibitionist measures.
“Prohibition has never worked as a policy tool – be it for alcohol, tobacco and now on vape products,” commented DARE’s managing director Pankaj Kumar.
Datametrics Research and Information Sdn Bhd (DARE) managing director Pankaj Kumar“What it does is fuel the illicit market by providing a compliance loophole. In turn, this is costing the government billions in lost revenue, shrinking legitimate businesses and destroying jobs.
“The key lies in enforcement of the law and not banning products that are swamped with counterfeits”.
Lost tax revenue  
DARE went on to highlight that Malaysia’s vape industry was once valued at RM3.48 bil and supported over 31,500 jobs but regulatory changes have led to a drastic shrinkage of the vape market.

According to the Health Ministry’s (MOH) data, registered brands have fallen from 3,200 to just 390 in less than a year since the Control of Smoking Products for Public Health Act 2024 (Act 852) came into force.


“This sharp contraction is not due to lack of demand. Malaysians continue to consume vape products. However, the differing federal and state laws have created a regulatory loophole that allows the existence and further expansion of the illicit nicotine market,” observed Pankaj.
“Consumers are simply being pushed into the illegal market where products are untaxed, unregulated and unsafe. That is a direct economic loss to Malaysia.”
DARE farther noted that Act 852 already provides a national regulatory framework with strict safeguards for minors. The most economically rational path forward, stressed the think tank, is consistent enforcement rather than bans that fuel the illegal market.
“Every RM1 spent in the black market is RM1 lost to legitimate Malaysian businesses and the government. Bans will only magnify this leakage. What the economy needs is regulatory certainty and enforcement, not prohibition,” reminded Pankaj. –  Focus Malaysia

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