When the Finance Minister Datuk Seri Anwar Ibrahim tabled the Federal Government Budget 2026 in Dewan Rakyat on 10th October 2025, he said that excise taxes on tobacco and alcohol products will be increased, yet he mentions nothing on e-cigarettes or vapes. This raises an important question: What exactly is the Ministry of Finance’s strategy on tackling the proliferation of e-cigarettes amongst youths?
Prior to the Budget announcement, industry players of e-cigarettes were already anticipating a review or increment on the excise duties to be imposed on their products. Just days earlier, Deputy Health Minister Datuk Lukanisman Awang Sauni had told Parliament that the Ministry of Health had proposed increasing the tax rate on e-cigarette liquids from RM0.40 to RM4.00 per millilitre, beginning next year.
The Deputy Minister further explained that, “one cigarette equals 10 puffs, and a pack of cigarettes equals 200 puffs. One millilitre of e-cigarette liquid (nicotine) equals 100 puffs, and two millilitres equals 200 puffs.”
Malaysia currently has a vibrant e-cigarette manufacturing industry and is among the region’s leading exporters of such products. According to the Malaysia Retail Electronic Cigarette Association (DPVM), the local e-cigarette industry was valued at RM3.48 billion in 2023, a 53% increase from RM2.27 billion in 2019.
If the government were to impose a total ban on e-cigarettes, it would heavily impact thousands of industry operators and retailers while significantly reduce its tax revenue. Worse still, prohibition would not eliminate consumption — it would fuel smuggling and expand the black market instead.
While a total ban is not a sustainable option, the Deputy Health Minister’s proposal to raise excise duty to match conventional cigarette levels would be a viable option. It would substantially increase retail prices, thus curbing the growth of e-cigarette users, especially among youths under 30.
However, it is surprising and concerning that no mention of e-cigarettes appeared in the Budget 2026 speech. Instead, taxes on alcohol, cigarettes, cigars, and heated tobacco products were raised.
While the rate increase was modest, it could push more smokers to switch to e-cigarettes, or worse — consuming both products. This raises several pressing questions: What is the government’s actual strategy for e-cigarettes? Does the absence of a tax hike imply that the government plans to ban their sale entirely in the near future?
Although such a ban has been widely called for, total prohibition cannot be implemented overnight. Some state governments have already banned e-cigarettes, but since neighboring states have not, users can still obtain supplies easily.
The e-cigarette industry has grown rapidly over the past few years, now involving tens of thousands of small and medium-sized businesses.
Its retail network is extensive — even Malay village shops, convenience stores, and restaurants are now selling e-cigarettes.
If the federal government decides on a total ban, many small traders will be affected. To strike a balance between public health and business interests, raising taxes is the necessary first step toward stricter regulation.
Another key measure should be the introduction of a minimum retail price for e-cigarettes. Else, e-cigarettes will remain cheaper than conventional cigarettes, continuing to attract young users.
In addition, before any total ban is enforced, the government must establish stringent controls over the industry. For example, it should ban “open-system” e-cigarettes, which allow users to mix dangerous substances such as cannabis, narcotics, and fentanyl — posing even greater health risks to youth.
As for “closed-system” e-cigarettes, the government should require that they undergo SIRIM quality certification, and be supplied only by manufacturers or importers licensed and approved by the Ministry of Health or Ministry of Consumers Affairs.
In conclusion, the government must implement these regulatory measures before the Federal Budget 2026 is passed in Parliament. Doing so would ensure fairness among industry players and help curb the growth of youth smoking population.
YB Lau Weng San
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