Malaysia’s RM2.27b vape industry too substantial to remain unregulated 

by RAHIMI YUNUS/ pic by HUSSEIN SHAHARUDDIN
 
Malaysia’s vape industry is estimated to be valued at RM2.27 billion.
 
Based on the Study on the Malaysian Vaping Industry report, the Malaysian Vape Chamber of Commerce (MVCC) said there are more than 3,300 businesses related directly to the vape industry, with a workforce of over 15,000 workers. 
 
It was further estimated that workers in the vape industry were paid up to a total of RM450 million in wages in 2019.
 
“Our data strongly indicate that this sector is a viable and growing industry in Malaysia and can contribute significantly to the local economy. 
 
“It has already facilitated the growth of local entrepreneurs, many of which are local and Bumiputera businesses,” MVCC president Syed Azaudin Syed Ahmad said in a statement today.
 
He said the Malaysian vape industry currently has an established ecosystem comprising manufacturers, importers and retailers, and a growing distribution and logistics network.
 
The report stated that the growth of the vape industry is on an upward trend with a 44% compound annual growth rate in 2019 compared to 2018.
 
The study also found that there are 1.12 million vapers in Malaysia based on Health Ministry (MoH) data and the ethnic profile of vape users is Malay (70%), Chinese (25%), Indians and others (5%).
 
MVCC said the vape industry in Malaysia is too substantial to remain unregulated and has urged the government to immediately introduce appropriate regulations to create a positive multiplier effect on the country’s economy.
 
Malaysia has introduced excise duty for e-cigarette devices, non-e-cigarette devices, juices and gels, including the non-nicotine type, during importation with exceptions given to local manufacturers.
 
Royal Malaysian Customs Department DG Datuk Seri Abdul Latif Abdul Kadir said devices will be charged excise duty at an ad valorem rate of 10%, while liquids and gels will be charged a rate of 40 sen for each millilitre.
 
He said local manufacturers would be licensed under Section 20 of the Excise Act 1976 with a licence payment of RM4,800 a year, while warehouse licence fee under Section 25 of the same act is RM2,400 a year.
 
The taxation on vape products is largely deemed as a major step to legalise the use of vape in Malaysia.
 
The Malaysian Reserve (TMR) previously reported that the government is projected to gain between RM265 million and RM300 million in tax revenue relating to vape products in the first year of the levies if nicotine type is included.
 
Malaysia Retail Electronic Cigarette Association (MRECA) president Datuk Adzwan Ab Manas told TMR that Malaysia could emulate the system and regulations that are being practiced in the UK.