Kuala lumpur: The government is considering a proposal to raise the tobacco tax rate, Prime Minister Datuk Seri Anwar Ibrahim said on Thursday. Anwar, who is also the Finance Minister, stated that the proposal aligns with the government’s commitment to public health and fiscal reform, especially given the long-standing moratorium on tobacco tax hikes.

According to BERNAMA News Agency, Malaysia’s tobacco tax currently accounts for 58.60 per cent of retail prices. The country lacks a formal mechanism for periodic adjustments or revaluation of the rate, which was last increased in September 2014. Anwar mentioned his support for health initiatives, citing personal reasons and the influence of anti-smoking campaigns, in response to questions about the possibility of revising the tax in Budget 2026, which is set to be tabled in October.

Anwar made these comments following a Budget 2026 engagement session. An economist recently suggested that the tobacco tax rate could be increased to between 60 and 75 per cent.

Last week, during the announcement of the 13th Malaysia Plan, Anwar revealed that the government would extend its ‘pro-health’ tax beyond sugary products to include tobacco, vapes, and alcohol. The expanded tax framework aims not only to increase revenue but also to encourage behavioral change and reduce the rising prevalence of non-communicable diseases (NCDs).

NCDs, often linked to unhealthy lifestyles, encompass heart disease, stroke, diabetes, and cancer. Anwar emphasized that healthcare remains a priority for the government, noting that the public system faces increased pressure from medical inflation, a dual burden of communicable and non-communicable diseases, and an ageing population.

According to the parliamentary calendar, Budget 2026 is scheduled to be tabled in the Dewan Rakyat on Oct 10.