Taxation on vape products can be implemented

KUALA LUMPUR - Vape products can only be taxed after the Ministry of Health (MOH) has completed examining legal issues related to the substance, said Deputy Finance Minister Sim Chee Keong.

"MoH is examining this from the legal point of view and there may be an announcement made in the budget (Budget 2023).

"If it is approved, I welcome the support from the opposition side, the maybe vaping can be taxed," he said during a question and answer (Q and A) session at the Dewan Rakyat on Wednesday.

He answered an additional question from Datuk Wan Saifulruddin Wan Jan (Perikatan Nasional-Tasek Gelugor) who wanted to know whether the government plans to impose a vape tax to increase the country's revenue.

Answering Wan Saifulruddin's question on the estimated loss of tax revenue due to the smuggling of tobacco products, cigarettes and alcoholic products, Steven Sim said, based on the confiscation calculation, the loss is estimated to be RM353 million in 2021 and RM364 million in (2022).

"However, according to industry estimates and through the reports that have been submitted to the government, it is of course an even bigger number and is most likely to reach up to RM5 billion a year," he explained.

He said, the government has always stepped up its efforts to combat the smuggling of cigarettes and liquor in order to curb the leakage of revenue and to solve or eliminate criminal syndicates.

He also said various control and enforcement methods have been implemented to deal with the issue, including limiting cigarette trans shipment activities to certain ports only, allowing the use of ISO-standard containers only and prohibiting the use of small boats including kumpit-type boats.