Japan Tobacco International Malaysia said the upcoming ban on the sale of vapes could further stimulate the illegal vape market, leading to the growth of illegal trade and costing the government lost tax revenue.
A study by Japanese Tobacco International Malaysia (JTI Malaysia) has revealed that despite a steady decline in the illicit cigarette trade in Malaysia since 2020, illegal cigarette sales still account for 70 to 80 percent.
JTI Malaysia Managing Director Juliana Yahaya said geography, understaffed law enforcement agencies, and the relatively low price of illicit cigarettes made it more difficult to combat the illicit cigarette trade.
- “East Malaysia has multiple border entrances with neighboring countries, making the illicit trade more difficult to control.”
According to Juliana. West Malaysia has a higher volume of cigarette sales due to its larger population, but only half of them are illegal. Meanwhile, after peaking at 63.8% in 2020, the overall proportion of illegal cigarettes has dropped to 55% in 2024.
Juliana expressed concern about the government’s new regulations for the vape industry, including a ban on the sale of vapes in stalls and shopping malls that will come into effect on April 1. She believes the ban could lead to a surge in demand for illegal vapes and fuel the growth of the illegal trade.
She noted that vape consumption in general has increased over the past few years.
- “When strict regulations such as nicotine content bans and excise taxes similar to those on cigarettes are introduced, smaller producers may struggle to comply and illegal e-cigarettes may become an emerging area.”
She added that the government would lose tax revenue as a result.
