Friday 29 Mar 2024
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KUALA LUMPUR (April 2): Following the removal of liquid or gel nicotine from the Poisons Act 1952 to allow for e-cigarettes and vape products to be taxed, local manufacturers who produce liquid or gel products containing nicotine are now given until April 30 this year to register their manufacturing activities with the Customs Department, according to the Ministry of Finance (MOF).

"Early registration within this prescribed period may prevent manufacturers from being charged a compound for the offence of late registration. This early registration will ensure comprehensive industry compliance and smooth tax collection by May 2023," the MOF said in a statement on Sunday (April 2).

This follows the imposition of an excise tax of 40 sen per millilitre on electronic cigarette (e-cigarette) liquid or gel containing nicotine from April 1.

Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim announced the government's plan to impose an excise tax on liquid or gel products containing nicotine when he retabled Budget 2023 in February.

The previous government under Datuk Seri Ismail Sabri Yaakob's administration also proposed to extend tax collection from gel or liquid products containing nicotine for vapes and e-cigarettes in the tabling of Budget 2022 by imposing a tax of RM1.20 per millilitre. However, the plan was postponed, because nicotine vape liquid was still classified as a Class C poison under the Poisons Act.

The new excise duty, the MOF said, would enable the government to tax the vape industry that is estimated to be worth over RM2 billion, and at the same time help discourage the use of vapes. It will also help improve rules and control of excise duty goods by the customs to avoid leakage of national income.

"In fact, as promised in the Budget 2023 announcement, part of this excise duty revenue will be reallocated to the Ministry of Health (MOH) as efforts to improve the quality of health services," the MOF said.

Fierce criticism

The government's move to delist liquid or gel nicotine has been met with fierce criticism, with strong objections from many involved in public health, as well as former health minister Khairy Jamaluddin, and independent think tank and public health advocate Galen Centre for Health and Social Policy.

While the government plans to introduce a new law to regulate all smoking products, including those containing nicotine, it will be a "free-for-all" season for vape players in the meantime, as no action can be taken against the sale and marketing of vapes, said Khairy.

Khairy said a new law must first be in place to regulate the sale of vape liquid before granting an exemption from the Poisons Act to levy the excise duty on the substance.

“If there is no new Act, there will be a lacuna (gap) in the law, because vaping cannot be controlled at all. That's why we brought the Smoking Control Act (Tobacco and Smoking Control Bill). But it was not approved in time. With the Act, nicotine products in vapes can be exempted, because there is a controlling Act.

"When reversed — the exemption was given before the new Act — no action can be taken against the sale and marketing of vapes. Now [it's] free for all. I hope @KKMPutrajaya will bring the Smoking Control Bill immediately to close this lacuna for the sake of public health," Khairy said in a series of tweets, and tagged the MOH.

The Galen Centre for Health and Social Policy, in a statement on Saturday, slammed the government's decision to remove liquid or gel nicotine from the list of controlled substances scheduled under the Poisons Act, with its chief executive officer Azrul Mohd Khalib calling it an "exceptionally regressive move, which has stunned many who work in public health, especially those in tobacco control".

Pointing out that the move went against the advice of the Poisons Board, which had unanimously rejected the proposal, he said the decision not only legitimises the use of nicotine e-cigarettes and vapes, but allows local industries to manufacture such products that are mostly imported from China now, so that they could be taxed.

"Unlike many countries, Malaysia still does not have legislation specifically for tobacco and vape control. While most countries around the world are moving towards curtailing and reducing the prevalence of smoking and vaping among their populations, the Malaysian government appears to be going in the opposite direction, seemingly in a desperate move to collect tax revenue. However, what it has instead potentially done is open the floodgates to existing and new problems, which are unable to be handled by the current healthcare and legal systems," he stated.

"Where previously nicotine was tightly controlled, this compound will now be easily accessible, used and manipulated without restraint or regulation. There are now absolutely no safeguards which prevent the online sale of e-cigarette and vape products of high nicotine concentration to anyone, including minors," Azrul said.

The start of a new public health crisis?

Azrul predicted that the latest policy decision will mark "the beginning of one of the biggest public health crises in Malaysia — a dramatic increase in young people and children who are addicted to nicotine through vapes".

"According to the National Health and Morbidity Survey 2019, 1.12 million people in this country are now using e-cigarettes. An industry survey indicated that around 68% of male respondents vaped, compared to 32% of women. At least 600,000 children between the ages of 11 and 18 have taken up vaping using disposable vapes containing high concentrations of nicotine of up to 5% — concentrations that are unavailable in other countries which regulate vapes. This is causing a new epidemic of nicotine addiction not only among adults, but also among young people. We are already seeing teenagers who are addicted to nicotine due to vapes. Why is the government ignoring its own data and evidence?" he asked.

"This decision also means that nicotine will likely be misused in drinks, and food like ice cream and sweets, as it becomes easier to procure. It will likely encourage made-to-order beverage sellers and custom vape retailers to experiment with the compound. It can and will lead to cases of nicotine poisoning. There are no safety standards for nicotine. A separate legislation or regulation will need to be developed to address this newly created loophole," he said.

He also pointed out that the revenue gained from imposing taxes on locally produced and imported vapes will quickly be consumed by the cost of treating the diseases that they cause.

"The direct cost of treating diabetes in Malaysia was estimated to be RM 4.38 billion annually...nicotine vapes increase a person's risk of developing high blood sugar. Those who vape have a 22% increased risk of developing prediabetes compared to those who do not. Encouraging vaping will increase the number of people suffering from diabetes, and increase the cost of the healthcare system," Azrul said.

"There is now only one remedy — the revised Tobacco and Smoking Control Bill must be tabled in Parliament as soon as possible. No more excuses, ifs and buts. Vapes should be taxed, but it also needs to be regulated as strictly as tobacco. That is only possible with the provisions contained in the Bill. The government and Members of Parliament must find the moral courage and vision to step up and do the right thing."

Edited ByTan Choe Choe
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