Malaysia is considering raising tobacco taxes in line with its broader push for public health and fiscal reform, said Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim.
The potential hike comes after a prolonged moratorium, with no revisions made to tobacco excise rates since September 2014. Currently, the tobacco tax in Malaysia stands at 58.6% of the retail price. Unlike several other nations, Malaysia lacks a formal mechanism for periodic price or tax reviews on tobacco products.
“I agree with the spirit of staying healthy. Not just because I don’t smoke, but because of the anti-smoking campaign,” said Anwar, responding to questions about whether the government will revisit tobacco taxes in Budget 2026, to be tabled in October.
He was speaking after attending the Budget 2026 engagement session held today.
Previously, economists had proposed raising the tobacco tax rate to between 60% and 75% as part of wider pro-health tax reforms.
During the tabling of the 13th Malaysia Plan (13MP) last week, Anwar announced that health-centric taxes would be expanded beyond sugar to include tobacco, electronic cigarettes or vapes, and alcohol.
He emphasised that this move is not solely to boost tax revenue, but also to drive behavioural change and curb the rise in non-communicable diseases (NCDs), such as heart disease, stroke, diabetes and cancer – all commonly linked to unhealthy lifestyles.
Anwar also underscored that healthcare remains a key national priority as the public system comes under strain due to medical inflation, the dual burden of infectious and non-infectious diseases, and an ageing population.
