Budget2025 Wishlist: Increase Cigarette Excise Tax and Minimum Cigarette Price to Curb Smoking Prevalence

24 Sept 2024, Kuala Lumpur

The Addiction Medicine Association, Malaysia (AMAM) together with the Federation of Private Medical Practitioners’ Associations, Malaysia (FPMPAM) are urging the government to increase cigarette excise tax and minimum cigarette price as part of the upcoming national Budget 2025. AMAM points out that the last excise tax increase occurred in 2015 and since then, no further adjustments have been made in the past 9 years.

FPMPAM stresses that increasing the excise tax on cigarettes is synergistic in achieving public health objectives.

Dr Shanmuganathan Ganeson, President of FPMPAM said, “Increasing the excise tax on cigarettes is essential to achieving our nation’s public health goals. Higher taxes have been proven to reduce smoking prevalence, especially among youth and lower-income groups, who are most vulnerable to the harmful effects of tobacco. By raising the cost of cigarettes, we can effectively decrease consumption, prevent new smokers from picking up the habit, and support long-term health outcomes for the population. This measure is not just about revenue; it’s a critical public health tool in the fight against smoking-related diseases.”

“The Government should consider implementing an excise regime that increases cigarette taxes annually at a fixed rate. A structured, predictable tax increase will ensure that the cost of cigarettes keeps pace with inflation and rising incomes, maintaining its effectiveness in curbing smoking. This approach provides a long-term, sustainable method for reducing tobacco consumption and reinforcing our public health objectives, while also sending a clear message that smoking comes with significant health and financial consequences.”

In addition,FPMPAM is also calling for the Government to increase the minimum price of cigarettes, which has remained unchanged at RM12 per pack since 2020. FPMPAM said that the current minimum price of cigarettes is not reflective of the total tax and duties imposed on cigarettes.

“We urge the Government to increase the minimum price of cigarettes, which has remained stagnant at RM12 per pack since 2020. The current price no longer reflects the total excise tax, sales tax, and import duties imposed on cigarettes, creating a disconnect between the true cost of tobacco products and their impact on public health. Raising the minimum price to a more accurate level of RM13.00 or RM13.50 will help strengthen the effectiveness of tobacco control measures and further reduce smoking rates,” Dr Shanmuganathan added.

FPMPAM believes that raising both the excise tax and the minimum price will help to reduce tobacco consumption and also contribute to increase government revenue, which can be used to fund public health programmes and tobacco control initiatives.

Dr. Steven Chow, President AMAM concluded that, “We strongly urge the government to include these adjustments in Budget 2025. These measures are important steps toward reducing smoking rates and improving public health outcomes in Malaysia. These actions, combined with broader tobacco control efforts, will help protect future generations from the harmful effects of smoking and align with the nation’s commitment to safeguarding the health and well-being of its citizens,”