Budget 2021: E-cigarettes and shisha to be subject to 10% tax from 2021

The Perikatan Nasional government has announced that e-cigarettes and other smoking devices will be subject to an ad valorem excise tax of 10 percent from the 1st of January 2021.

During the tabling of Budget 2021, Finance Minister Tengku Zafrul announced that the tax will apply to all smoking devices—both electronic and non-electronic versions. This includes vapes, electronic heated tobacco products, as well as more traditional tobacco devices such as hookah/shisha and smoking pipes.

Additionally, the government will also be imposing an excise duty of 40 cents per ml for e-cigarette liquids—or vape juice, as they’re commonly referred to. The Finance Minister also said that an import quota will be introduced for cigarette imports, which will tighten the renewal process for cigarette importers.

This is a significant move from the government, given the controversial nature of e-cigarettes. For the most part, the e-cigarette industry has been largely unregulated in Malaysia, although there were previous plans to introduce legislation to govern the industry for 2020.

To read our full coverage of Budget 2021, click here.

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