Galen Centre: Raising cigarette excise duty by 77 sen per stick could see additional RM771.8 mln tax revenue

Borneo Post

12 hours ago

Azrul said Malaysia spends an estimated RM16 billion annually treating smoking-related illnesses such as cardiovascular disease and lung cancer. — Bernama photo
KUCHING (Aug 11): The Galen Centre for Health and Social Policy has called for an increase in excise duties on cigarettes and other tobacco products.
Its chief executive officer Azrul Mohd Khalib said Budget 2026 should raise the excise tax rate on cigarettes to at least 77 sen per stick, equivalent to 61 per cent excise tax of the retail price.
'This would generate an additional tax revenue of RM771.8 million. Astonishingly and contrary to global trends, these taxes have remained unchanged since 2015,' he said in a statement today.
According to Azrul, Malaysia spends an estimated RM16 billion annually treating smoking-related illnesses such as cardiovascular disease and lung cancer.
For every RM1 collected from tobacco excise duties, RM4 is spent on treating smoking related diseases, he pointed out.
'We do not yet know how much will be spent on treating vape-related diseases.'
He said increasing the duties to meet World Health Organization recommendations at 75 per cent would raise at least RM1 billion more in revenue, potentially bringing it to more than RM5 billion collected from tobacco excise duties.
Given this, he wondered why Malaysia is hesitating, asking: 'If not now, when?'
Azrul said Malaysia must also be firm on the threat posed by nicotine vape and e-cigarettes, now rapidly replacing cigarette smoking among young people and teenagers.
The National Health and Morbidity Survey (NHMS) Adolescent Health Survey 2022 revealed that there had been a decline in the reported rate of smoking among teenagers and adolescents, he said.
However, he said the same report indicated a significant increase in the prevalence of e-cigarette and vape use among this group of people.
'The rates of adolescents vaping between the ages of 11 and 18 in Malaysia now exceeds those reported in several countries including the United States.
'Despite a ban on open retail display of cigarettes, vape, and e-cigarettes embedded in the regulations for the Control of Smoking Products for Public Health Act 2024, it has yet to be enforced. It was supposed to be in effect from April 1.
'Unfortunately, the government delayed its enforcement to October. The effect of this delay can be seen in the continued open retail sales of these products as if the regulations don't exist,' he said.
Azrul stressed evidence from studies had shown that widespread presence of cigarette displays at the point of sale increases the likelihood that youth will start smoking and stimulate impulse purchasing among existing smokers.
Experience from countries such as Singapore, Saudi Arabia, and Australia with the display ban in place has shown that it works to reduce smoking initiation which is common during adolescents, he said.
'The enforcement of the open display ban of cigarettes, vape, and e-cigarettes embedded under the Control of Smoking Products for Public Health Act 2024 also needs to be carried out,' he added.
The Galen Centre for Health and Social Policy is an independent public policy research and advocacy organisation based in Malaysia, dedicated to discussing health and social issues through the lens of public policy.