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MOF: Vape players has until April 30 to register their manufacturing activities to avoid compound

Publish date: Sun, 02 Apr 2023, 06:00 PM

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 products liquid or gel containing nicotine  are now given till 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 offense of late registration. This early registration will ensure comprehensive industry compliance and smooth tax collection by May 2023," the MOF said in a statement Sunday.

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

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 had also proposed to extend tax collection to gel or liquid products containing nicotine for vapes and e-cigarettes in the Budget 2022 tabling, by imposing a tax of RM1.20 per milliliter. However, the plan was postponed because nicotine vape liquid was still classified as a Class C poison under the Poisons Act.

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

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

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 and independent think tank and public health advocate, the 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 vape, said former health minister Khairy Jamaluddin.

Khairy, who previously indicated his support for the government's plan to tax the nicotine-based products used in e-cigarettes in an social media post, said a new law must first be in place to regulate the sale of vape liquids before granting an exemption from the Poisons Act to levy the excise duty on the substances.

“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 vape 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 & marketing of vape. Now free for all. I hope @KKMPutrajaya will bring the smoking control bill immediately to close this lacuna for the sake of public health," he said in a series of tweets, and tagged the Ministry of Health.

The Galen Centre for Health and Social Policy, in a statement 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 and 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 it legitimises the use of nicotine e-cigarettes and vape, but allow 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 its population, 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 system," he stated.

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

He 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 vape".

"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 vape containing high concentrations of nicotine of up to 5%. Concentrations that are unavailable in other countries which regulate vape. 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 vape. Why is the government ignoring its own data and evidence?" he asked.

"This decision will also mean 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 vape 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 vape increases 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. Vape 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."

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