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Excise

Malaysia’s excise rate on beer is the second highest in the world, alongside Singapore and behind Norway, despite both countries having much greater purchasing power than Malaysia. In 2016, Norway’s household income per capita was more than 9 times greater than Malaysia’s.

Furthermore, the current excise regime is inequitable, with a higher tax rate imposed on lower alcohol content beverages, such as beer and stout, compared to higher alcohol content beverages like wine and spirits. According to international best practices, excise tax on alcohol should correspond with the alcohol content of the beverage, with the highest duties being imposed on liquor and spirits.

Our current inequitable tax regime, with high excise placed on beer, is causing many price-conscious consumers to turn to illicit (contraband, counterfeit and unregulated) beer.

Countries

€/liter

Norway

55 €/liter

Malaysia

40 €/liter

Singapore

40 €/liter

Sri Lanka

38 €/liter

Australia

32 €/liter

Thailand

28 €/liter

United Kingdom

20 €/liter

Indonesia

18 €/liter

New Zealand

18 €/liter

Taiwan

15 €/liter

Myanmar

9 €/liter

Vietnam

7 €/liter

Cambodia

6 €/liter

Laos

5 €/liter

Mongolia

4 €/liter

China

3 €/liter

Hong Kong

2 €/liter

05
10
15
20
25
30
35
40
45
50
55
60

*Source : The Socio-Economic Impact of CMBB in Malaysia by Steward Redqueen (December 2018)

Excise Per Degree of Alcohol

Compounded Hard Liquor

ABV
40%

RM 0.60 / degree of alcohol

Premium Hard Liquor

ABV
40%

RM 1.50 / degree of alcohol

Wine

ABV
14%

RM 1.50 / degree of alcohol

Beer

ABV
5%

RM 1.75 / degree of alcohol

*Alcohol by Volume (ABV) is a measure of how much alcohol is in beverage

*Source : The Socio-Economic Impact of CMBB in Malaysia by Steward Redqueen (December 2018)

Beer

Wine

Premium Hard Liquor

Compounded Hard Liquor

2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2

Ideal trend of excise duty according to international best practice

Current Excise Structure

The graph shown represents the excise duty that is imposed on industry players of Beer, Wine, Premium Hard Liquor and Compounded Hard Liquor. The best international practise clearly defines higher excise duty for higher alcohol contents based on Alcohol by Volume (ABV), where Beer and Compounded Hard Liquor are on opposite ends.

However, in Malaysia, the excise based on ABV is reversed where Beer is subjected to highest excise duty compared to the highest ABV, which is Compounded Hard Liquor. This trend has continued from the past and even till present which impacts the industry and its contribution to the economy overall.