In Malaysia, the Health Ministry has launched a plan to hike the excise duty on vape liquids by 900%—from 40 sen to RM4 per millilitre—as part of a broader shift toward banning e-cigarettes entirely. The Malaysian Organisation of Vape Entities (MOVE) has launched a fierce critique of the proposal, with MOVE president Samsul Kamal Ariffin warning that this approach is both illogical and dangerous for public health goals. He argues that making vapes more expensive than conventional cigarettes undermines their role as a lower-risk alternative for smokers trying to quit.
Samsul rightly cautions that steep taxes or outright bans tend to drive users towards the black market, where product quality is unregulated, risks are greater, and the government loses tax revenue. He points to examples such as Australia and Singapore, where tight restrictions have fueled illegal trade to the extent of forming complex criminal networks, rather than reducing consumption. What’s more, MOVE had previously been told the Finance Ministry would consider a modest increase—from 40 sen to 80 sen per millilitre. The abrupt leap to a 900% increase is inconsistent with those earlier discussions highlights Samsul.
From Malaysia to Brussels
To add insult to injury, a leaked EU plan suggests the Commission intends to tax nicotine products as if they were cigarettes, eliminating much of the price advantage that encourages smokers to switch. The document outlines flavour and packaging bans, environmental regulations, and sweeping restrictions that could eliminate entire product categories. This would leave the most harmful nicotine source—combustible cigarettes—relatively untouched. Critics argue that such a tax regime would deter switching, shrink the legal market, and keep smokers locked into deadlier options.
Taxing the cure
Meanwhile Sweden’s success provides a real-world counter example. Because Sweden treats snus and nicotine pouches as reduced-risk products with favourable tax status, it boasts a daily smoking rate of just 5.4%, the lowest in the EU. Hence the nation has now formally challenged bans on nicotine pouches in member states, arguing they violate free movement rules and undermine public health.
Leaked proposals suggest nicotine pouch excise rates could increase by 650–800% in some jurisdictions—an extreme leap that would make pouches prohibitively expensive for many users. If pricing becomes too burdensome, switching back to cigarettes may feel like the only affordable nicotine option.
Why such taxes are detrimental: according to evidence and economics
There is an established principle in public health economics: tax incentives should reflect relative risk. When low-risk products are taxed like high-risk ones, the tax structure undermines incentives to switch. The Tax Foundation Europe has argued that excise tax reforms which embrace risk differentiation—taxing cigarettes heavily, but applying lower rates to reduced-risk products—would encourage substitution and support public health goals.
Similarly, academic literature warns us (dare I add – as does common sense) that raising vaping tax rates to parity with cigarette taxes can inadvertently increase cigarette use, especially when adult smokers are priced out of the safer option. In the U.S., commentary has also emphasized that vaping taxes could slow cessation progress and fuel illicit markets, ultimately raising harms.
In Europe, the Commission’s own statement supporting the update of tobacco excise rules cites revenue gains—but also claims that higher tax on alternative nicotine products will “help to reduce their attractiveness as tobacco substitutes.” This logic directly conflicts with harm reduction: discouraging substitution undermines the pathway out of smoking.
Failing both smokers and public health
Though Malaysia and the EU differ in market structure and regulation, they present a shared paradox: penalising the very tools that help smokers quit. In Malaysia, a 900% tax hike would likely push vapers back to cigarettes or illicit liquid. In Europe, harmonised taxation that ignores product risk undermines innovation and the chance for adult smokers to switch.
In both cases, the fiscal logic of “more tax = less harm” ignores substitution dynamics and economic incentives. When switching becomes unaffordable, many will stay or return to cigarettes. The result? Sliding backwards in the fight against tobacco-related disease.
Aligning with evidence-based tax policy
If public health truly drives these policies, a better path emerges: differential taxation based on relative risk. Cigarettes should remain highly taxed. Vapes, heated tobacco, and nicotine pouches—while not risk-free—deserve lower tax rates. This approach incentivizes switching, preserves legitimate markets, protects consumers from illicit products, and supports both harm reduction and revenue goals.
As EU critics, including Swedish officials, argue that blanket taxation will undermine those very gains.The Malaysian government, too, must consider that its endgame—to ban vaping entirely—requires public buy-in. If reduced-risk products are made unaffordable, the smoking population becomes even harder to reach through abstinence-only policies. In both Malaysia and Europe, policymakers now face a stark choice: set prohibitive taxes that choke off harm reduction, or adopt a pragmatic, evidence-aligned tax framework that empowers smokers with safer alternatives rather than forcing them back into the smoke.
Punishing Progress: The EU Seems Set to Tax Away Its Best Chance to End Smoking?
