Malaysians who enjoy a drink or a smoke will soon have to dig deeper into their pockets, as the government moves to raise excise duties on cigarettes and alcoholic beverages effective next month, a move aimed at both boosting public health and broadening fiscal revenue.
Announcing the measure during the Budget 2026 presentation on Oct 10, Prime Minister Datuk Seri Anwar Ibrahim said the government will hike cigarette duties by two sen per stick, while excise on cigars, cheroots and cigarillos will increase by RM40 per kg.
For heated tobacco products, excise duty will rise by RM20 per kg of tobacco content, and liquor products will see a 10% increase in excise duty.
“At the same time, to reduce access to alcoholic beverages and promote a healthier lifestyle, the government has increased the excise duty rate on alcoholic beverage products by 10% starting Nov 1, 2025.
“The additional revenue generated from tobacco and alcohol will be channelled directly to the Health Ministry, including funding for the ‘KKM Lung Health Initiative’ and the treatment of diabetes and heart disease,” Anwar said in Parliament.
The government’s decision underscores its twin objectives: Discouraging unhealthy consumption while strengthening funding for preventive healthcare and disease treatment.
Meanwhile, Anwar also announced an extension of import duty and sales tax exemptions for nicotine replacement therapy products, including nicotine mist and lozenges, until Dec 31, 2027, supporting Malaysians seeking to quit smoking.
Overall, Budget 2026’s sin tax adjustment reflects Malaysia’s evolving fiscal approach using targeted levies not just to raise revenue, but to incentivise healthier lifestyles and build a more sustainable healthcare system.
