Regulate and tax vape for income


A FEW things happened recently that the government finally made clear. The first is the need for a RM45 billion Supplementary Bill to pass parliament in lieu of the additional spending during the movement-control order (MCO).

The second was the announcement that the Malaysian government is looking for ways to generate revenue to make up for the loss of income. Both mean that government needs to find revenue that was previously untapped and left without oversight.

And what better opportunity than that to regulate and tax vaping and e-cigarettes, which have, yet again, been left in a grey area since 2016.

Countries such as Korea and Indonesia have already taxed vaping, though both are quite excessive in their amounts. Though it would be fair to say that both countries have a vested interest in keeping cigarettes as the main choice for the population.

Meanwhile, New Zealand approved to regulate vape before announcing their election, and the Philippines approved to regulate vape last week, regardless of what their president has said in the past.

Thus, Malaysia is primed to do both, to cope with the need for a new revenue stream and also to shift the population away from traditional combustible tobacco while maintaining and strengthening regulations on devices, liquids and even tobacco sticks.

The first move would be to allow the Ministry of Health (MOH) to take action against those advertising or packaging their products specifically targeting youth. New Zealand’s regulations can be an example of this; its MOH has the ability to police the advertising and packaging of each and every e-cigarette and vaping product.

Although, I’m not sure how the MOH would react to getting revenue from advertisements from vaping. Probably the same way they feel about advertisements on alcohol?

By doing this, companies that clearly target youths can be banned and made to change their products to suit the above-18 category they should be catering for.

At the same time, it would also allow the MOH to regulate the content of these products. This would be beneficial to society at large, especially to prevent nicotine poisoning, restrict flavours obviously targeting the youth market, and the use of harmful additives such as THC, which triggered the EVALI scare early last year.

More importantly, having such regulation would also allow the Malaysian vaping industry to finally come out of limbo, of being between raids and winning awards and accolades for their products in overseas markets.

But, more urgently, the discussion on legalising and taxing vape has been ongoing for three years, with papers and bills already written and primed for release even before the Sheraton move. Thus, it isn’t exactly reinventing the wheel when you have done your stakeholder engagements, and only have to get it through parliament with a simple majority.

At the same time, maintaining the current regulations, of treating vaping like cigarettes (where you have to walk three meters away for a puff, banning it from public areas and even limiting the sale to those over the age of 18), are all acceptable conditions for everyone.

These are, of course, just a few of many things the government could do to bolster its revenue from the general public and industries. Others, such as the reintroduction of the goods and services tax (GST), increasing tobacco duties, introducing an estate tax, and the automation of traffic, emission and environmental laws would, in the end, generate enough income for the government, provided that there are no leakages.

And that’s the biggest problem right there – leakages. When one minister or MP suddenly gets off on a traffic fine or even an MCO compound and flouts it to the rest of the country, it all falls apart. If taxation, just like any other law, were to be equally applied to everyone, then everyone must face the law in equal measure.

Anything less, any leakage and observed bias in the system, and it will all be seen as nothing more than theatre. – September 1, 2020.

* Hafidz Baharom reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.


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