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'Scrap Labuan's duty-free curbs imposed by BN'
Published on: Thursday, May 17, 2018

Labuan: The Labuan Chinese Chamber of Commerce (LCCC) wants the new government formed by Pakatan Harapan to abolish the curbs placed on the island's duty free status since November 2016.

Its Chairman Datuk Wong Kii Yii said: "The restrictions on the import, sales and distribution of beer, liquor and cigarettes to disallow buying above the allowed quota was of no help in attracting more visitors to the island nor it managed to end smuggling. The meddling of the island's free-port status served no purpose but added local business gloom."

Under the restructuring during Budget 2016, the retail sales of hot items at duty-free outlets was limited to three crates of beer (24 cans) five litres of liquor/wine and three realms (10 packets) were allowed to be purchased by a customer per month.

The purchases were recorded on a data-base and the designated duty-free shops were monitored by Customs officials. There are 21 such shops and 30 over Customs officials had to be engaged to implement the new measures at the point of sales. Many found this as "penny wise pound foolish" as it meant paying out more wages.

Initially it started out with active monitoring of the shops but now it has cooled down with most shops using their own staff to record the sales for the Customs Department "yet this is a nuisance and a hassle to customers," explained Wong.

When the measures were proposes, the chamber together with others, including the local Member of Parliament Datuk Rozman Isli, made vociferous complaints and object, including meeting with senior officials and the Finance Minister II, Datuk Johari Abdul Ghani. But the department remained adamant, saying the ruling was necessary to curb smuggling. It was reported that revenue amounted to RM5 billion from duty-free islands.

Wong's argument was that there was a need to beef up enforcement agencies and not punish traders with the new rules. He had said Labuan was merely a 70 sq km island and should not be difficult to monitor if there were serious efforts.

The Chamber hoped new Finance Minister Lim Guan Eng will open the files and restore the island's status.

"Labuan deserves the full benefits from the status," said Wong.

He also said Labuan had been a duty-fees island since 1884 and the status was a historical and legacy of British rule and should not be disturbed without strong justifications. - Sohan Das

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