KUALA LUMPUR, Feb 24 — Prime Minister Datuk Seri Anwar Ibrahim said the government will impose an excise duty on liquid or gel products containing nicotine, with half the revenue to be allocated to the Health Ministry.

When tabling Budget 2023 today, he said that the liquid or gel products with nicotine were widely used with electronic cigarette and vaping, despite this being technically illegal.

Anwar, who is also the finance minister, said these products were ubiquitous and the industry was estimated to be worth over RM2 billion.

"It would be nice if it was regulated and taxed to discourage vaping.

"The government supports the Generational End Game (GEG) effort and has agreed that half of the revenue from this excise duty will be allocated to the Health Ministry as an effort to improve the quality of health services,” he said.

Anwar added that in order to reduce the leakages, enforcement efforts by government agencies will continue to be intensified together with the industry.

He said this is to curb the leakages of revenue and subsidies by smuggling syndicates such as diesel, alcohol and cigarettes.

The previous government announced plans under Budget 2022 to expand tax collection to vape liquids containing nicotine by imposing excise taxes at RM1.20 per millilitre, but the enforcement was postponed.

A recent study by tobacco firm JTI Malaysia, based on projections, noted that the government missed the opportunity to collect RM866 million in taxes last year from liquids used for vaping or electronic cigarettes.