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Joseph Sipalan

Iman Muttaqin Yusof

As the workday grinds on in Kuala Lumpur, 23-year-old office worker Adib finds solace in a few quiet cigarettes, but his unhealthy habit is about to come at a higher price.
From next month, a new government policy will drive up the price of tobacco and alcohol in Malaysia as higher so-called sin taxes take effect.
Unveiled by Prime Minister Anwar Ibrahim in last week’s budget, the measure aims to improve public health. Yet it has also raised concerns about the rising cost of living.
It represents Malaysia’s first broad-based “sin tax” increase in years, raising duties by 2 sen (less than 1 US cent) per cigarette and increasing alcohol taxes by 10 per cent.

Officials say the additional revenue will fund health initiatives, but for many, the impact will be felt far closer to home.
“I’m sad and honestly a bit depressed. Heartbroken, even,” said Adib, who asked to be identified by only his first name for privacy. “Higher tax means higher expenses, and I guess that also means higher mental instability for me.”
He smokes two to three cigarettes each day, spending roughly 50 ringgit (US$12) a month, a sum he estimates will soon rise to 55 ringgit. “It adds up over time,” he said.
Malaysia already enforces some of Southeast Asia’s strictest anti-smoking laws: smoking is banned in most indoor public spaces, including restaurants, air-conditioned offices and government buildings and shops are forbidden from openly displaying cigarette packs.

Some business owners expect the new taxes to hurt sales. One in Kuala Lumpur, who requested anonymity fearing government reprisal, said he had shelved plans to expand his tobacco and cigar business, predicting a 20 per cent drop in custom once the taxes take effect.
“If the price goes up, who’s going to buy it?” he asked. “Our revenue’s only around 3,000 ringgit a month, and the new health ministry rules make it harder.”
Alcohol retailers and consumers are bracing for similar shocks. Urban centres like Kuala Lumpur and Penang, where nightlife is woven into the social fabric, are expecting to be hit hardest by the tax increases.
In the Muslim-majority nation, where alcohol consumption among elites is often frowned upon, the burden will fall most heavily on non-Muslim drinkers and businesses serving tourists.
Imagine how much more I’ll have to pay when the tax goes up!
Jane Leong, Kuala Lumpur office worker
“I don’t drink that much, but it’s one thing I look forward to every other Friday just to de-stress with my girlfriends,” Jane Leong, a part-time office worker and housewife in Kuala Lumpur, told This Week in Asia.
“If the government raises the base price by 10 per cent, clubs are going to raise it even more … imagine how much more I’ll have to pay when the tax goes up!”
The new policy aligns with Anwar’s “Madani” governance framework, which emphasises moral and financial discipline, according to Kamles Kumar, the Malaysia lead at advisory firm Asia Group Advisors.
“Raising excise taxes on tobacco and alcohol supports both fiscal and health objectives,” he said, while cautioning that the policy also risks alienating lower-income Malaysians already struggling with economic pressures.

Many among this demographic have already turned to the illicit market. Illegal cigarettes now account for more than half of Malaysia’s tobacco sales, costing the government billions in lost tax revenue each year. Smuggled packs are frequently sold for as little as 5 ringgit, less than half the legal minimum price of 12 ringgit.
For some, the new tax may serve as the final push they needed to quit. Tajul Arief, a 25-year-old who runs a marketing agency, sees it as an opportunity.
“Price increases are a good start … encouraging people to cut down or quit since it gets more expensive and it’s for overall health purposes,” he said.


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Malaysia

Malaysia’s smokers and drinkers brace for a ‘sin tax’ shock: ‘I’m sad and a bit depressed’

A bartender fills a glass with beer for a customer in Kuala Lumpur’s Bukit Bintang nightlife district. Photo: AFP

A construction worker smokes a cigarette in Kuala Lumpur with the Petronas Twin Towers in the background. Photo: AFP

Cigarette butts are seen in an public ashtray in Kuala Lumpur. Malaysia already enforces some of Southeast Asia’s strictest anti-smoking laws. Photo: AFP

A bartender fills a glass with beer for a customer in Kuala Lumpur, Malaysia. Photo: AFP

Malaysian minister called to resign after boozy dinner reignites culture wars

Malaysian MP Tiong King Sing (centre) pictured at an event with alcohol in 2016. Photo: Facebook/Adam.Yii

Global Travel Meet 2025 participants pose for a photo at the gala dinner. Photo: Facebook/Sam’s Travel & Tours

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Race winner George Russell (centre) of Mercedes-AMG Petronas Formula One Team, Petronas CEO Tengku Muhammad Taufik Tengku Aziz (left) and third-placed Lando Norris of McLaren celebrate on the podium with champagne during the Singapore Grand Prix on Sunday. Photo: Formula 1 via Getty Images

Mercedes’ George Russell (second from right) celebrates on the podium after winning the Singapore Grand Prix alongside Red Bull’s Max Verstappen, McLaren’s Lando Norris and Petronas CEO Tengku Muhammad Taufik Tengku Aziz. Photo: Reuters

Tourism Minister Tiong King Sing was accused of disrespecting Malay sensibilities and Islam’s status as Malaysia’s official religion by allowing alcohol to be served at the Global Travel Meet 2025 gala dinner last week. Photo: Facebook

First booze, now beef? Malaysia called to extend menu ban at government events

A woman cuts into a steak in a restaurant. A party in Malaysia is asking for beef to not be served during government functions. Photo: Shutterstock

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This Week in Asia

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People

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Southeast Asia

The tax increase, aimed at improving public health, will make cigarettes and alcohol costlier, hitting lower-income Malaysians the hardest


The tax increase, aimed at improving public health, will make cigarettes and alcohol costlier, hitting lower-income Malaysians the hardest.
