Kuala Lumpur, 11 July 2024 — The Galen Centre for Health and Social Policy is shocked and concerned that revenue from taxes imposed on nicotine and non-nicotine liquids since 1 May 2023, have not been earmarked for health related initiatives, specifically under the Ministry of Health, in contradiction to a promise made and announced during tabling of the 2023 national budget.

The Finance Minister, in a written reply to a question from Member of Parliament Wan Saiful Wan Jan recently, revealed that the Government had already collected RM141.1 million in vape liquid tax revenue, comprising RM82.51 million from non-nicotine vape liquid and RM58.55 million from vape liquid containing nicotine for the period of 2021 to 2024. It is both surprising and extremely disappointing that the Minister indicated that rather than being earmarked for health, the revenue would instead be deposited into the Federal Consolidated Fund,” said Azrul Mohd Khalib, Chief Executive of the Galen Centre for Health & Social Policy.

“This move is in direct contradiction with one of the supporting arguments used to justify and enact the tax, and breaks one of the promises made during the Finance Minister’s budget speech on 24 February 2023. In that speech, he pledged to earmark half of the revenue collected to be used for health. This money is intended to complement existing allocations given to the Ministry of Health, especially in the area of health education and promotion which is severely underfunded.”

“In light of last year’s detrimental decision to remove liquid nicotine used for vape and e-cigarettes from the scheduled substances under the Poisons Act without having an alternative regulation already in place, nicotine vape and e-cigarettes became totally unregulated resulting in sales, distribution and marketing of these products being unrestricted and unprohibited. It was to such an extent that even children and adolescents could freely purchase and use such cheap and widely available products containing nicotine to vape. It was and continues to not be illegal for retailers to sell them to children. We have seen a dramatic increase in the number of individuals who vape and are underaged,” Azrul highlighted.

“The findings from the Ministry of Health’s 2023 Global Adult Tobacco Survey (GATS) Malaysia survey are clear. Tobacco smoking prevalence only dropped 4 points to 19% in 2023 from 23.1% in 2011, but dual tobacco and e-cigarette users rose to 3.9%. The prevalence of vape surged 600%. It is obvious that vape does not reduce tobacco smoking, and is now a separate problem needing to be addressed. Alarmingly, the majority of e-cigarette users are now aged 15 to 24 years. This is what public health advocates predicted would happen if the government proceeded with deregulation , and it is now a reality.” Azrul pointed out.

“Government and non-governmental organisations working in public health are going to need all the additional resources that they can get to deal with the consequences of unrestricted and unprohibited marketing and sales of disposable nicotine vape devices, including through vending machines. The vape tax revenue would have been used for this purpose. Half of RM 141.1 million is RM 70 million more funds which could help repair the damage of having nicotine vape completely deregulated for more than a year. This was how the Government justified to public health experts, advocates and anti-cancer groups on the need to remove nicotine vape from the scheduled list, introducing regulation, instead of banning them outright.”