Malaysia’s tobacco tax revenue surges, contributing over RM15.3 billion (approximately US$3.3 billion) from 2021 to 2025, with vape taxes hitting record highs and consumption trends becoming clear.
Key Highlights:
- Malaysia’s tobacco product tax revenue has grown significantly in recent years, contributing over RM15.3 billion (approximately US$3.3 billion) from 2021 to 2025.
- vape tax revenue surpassed traditional cigarette taxes for the first time since 2021.
- A new tax regime for e-liquids took effect in May 2023.
- The government implemented multiple tax policies to boost national fiscal revenue.
According to The Star’s August 26 report. Malaysia’s Ministry of Finance stated that from 2021 to July 2025, excise duties on tobacco products generated RM15.3 billion (approximately US$3.3 billion) in government revenue.
During this period, total tax revenue from nicotine-containing or nicotine-free e-liquids or gel products for vape devices reached RM28.845 million (approximately US$6.14 million). In contrast, tax revenue from traditional cigarettes amounted to RM15.02 billion (approximately US$3.2 billion).
Overall, from 2021 to July 2025, the combined tax revenue from these two product categories totaled RM15.3 billion. Under regulations, cigarettes, tobacco products, and goods like vape devices and e-liquids are subject not only to consumption tax but also to sales tax and import duties upon entry.
Initially, a consumption tax of RM0.40 per milliliter (approximately US$0.095) was imposed on nicotine-free e-liquids or gels used in vapes. Additionally, effective January 1, 2021, all types of electronic and non-electronic smoking devices, including vapes, became subject to a 10% ad valorem GST rate.
Subsequently, starting May 1, 2023, the scope of GST collection expanded to include nicotine-containing e-liquids and gels used in vapes, levied at a rate of RM0.40 per milliliter.
