Moh S Proposed 1 000 Vape Liquids Tax Hike Will Backfire Illicit Products Will Infiltrate Market

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THE Consumer Choice Centre (CCC) has warned the Health Ministry (MOH) that its proposal to raise excise duty on vape liquids from 40 sen to RM4/millilitre (ml) – or a 1,000% hike – only risks driving consumers toward illicit products.
Not only will this undermine harm-reduction goals and reversing Malaysia’s progress in evidence-based public health policy, the drastic increase would create unintended harm without addressing the root causes of youth vaping or nicotine dependency., according to CCC Malaysia country associate Tarmizi Anuwar.
“Taxation should guide behaviour, not punish it. A 1,000% jump will not make Malaysia healthier,” he lamented ahead of today’s (Oct 10) tabling of Budget 2026.
“It will simply make safer products unaffordable and push consumers into unregulated markets.”
CCC Malaysia country associate Tarmizi AnuwarAs it is, Malaysia has been recording one of the highest illicit cigarette rates in the world. As of May 2025, the national illicit trade rate stood at 54.5%, according to Nielsen Consumer LLC.
Although enforcement has improved and illicit trade has declined from previous years, this progress remains fragile. A sudden and extreme tax hike risks reversing these gains by re-opening incentives for smuggling and unregulated sales.
10-fold hike in monthly expenses
As typical adult users consume around 5 millilitres daily or 32.5ml weekly of vape liquid, even moderate users would see their monthly expenses multiply ten-fold under the proposed rates.
For regular vapers using 2ml daily, monthly costs could surge from RM24 to RM240, a ten-fold increase that would hit low-income consumers hardest.

According to Public Health England, vaping is at least 95% less harmful than smoking while the Office for Health Improvement and Disparities has found that in the short and medium term, vaping poses only a small fraction of the risks associated with traditional cigarette use.

Therefore, punitive taxation removes incentives for smokers to switch to these lower-risk alternatives.
Moreover, MOH itself has acknowledged that detailed local disease data on vaping are still being collected. As such, policy decisions should therefore remain flexible and proportionate, not extreme.
In September, 83 leading public health experts warned in a joint letter that the European Commission’s (EC) new tobacco tax proposal ignores scientific evidence and risks reversing public health progress.
They urged policymakers to implement fair taxation that reflects actual risk differences between products and praised the success of countries such as the UK and Sweden which have reduced smoking rates to record lows through harm reduction and balanced fiscal policies.
‘Regulate smarter, not harder’
Yet, the Commissioner has ignored their advice which Tarmizi reckoned Malaysia should learn from this mistake by abstaining from punitive models that neglect scientific evidence and practical outcomes.


Instead, he proposes a tiered excise framework aligned with international best practices. All non-combustible nicotine products, including vape liquids, heated tobacco and nicotine pouches, should be taxed at rates lower than traditional cigarettes.
On this note, the government should maintain the current 40 sen/ml rate for vape liquids under Malaysia’s mixed excise system which already includes a 10% ad valorem tax.

This approach ensures that less harmful alternatives remain more affordable and accessible than combustible tobacco, thus supporting the principle of risk-proportionate taxation within Malaysia’s existing fiscal structure.
By doing so, it encourages adult smokers to switch to safer alternatives while maintaining government revenue and strong regulatory oversight.
“If the government truly wants to protect youth and improve health outcomes, it must regulate smarter, not harder,” insisted Tarmizi.


“A risk-based tax system that makes less harmful products more affordable rewards positive choices and keeps the market transparent, legal and easier to enforce.”
On the note, the CCC urged the Dewan Rakyat and MOH to review the proposal ahead of Budget 2026 as well as to conduct an impact assessment on price elasticity, consumer behaviour and illicit trade.
“The government should phase in moderate, evidence-based adjustments rather than sudden hikes and ensure that excise revenues are channelled into cessation support, public education campaigns and stronger enforcement,” stressed Tarmizi.
“Malaysia’s regulatory framework under Act 852 should be used to manage the market responsibly, not to eliminate consumer choice. Let’s make this a health policy guided by evidence, not emotion.” –  Focus Malaysia

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