Labuan duty free island is black market hub? Prove it!

THE Labuan Chinese Chamber of Commerce has been left infuriated by the recent statement made by Finance Minister Datuk Seri Tengku Zafrul Tengku Aziz which implied that duty-free areas are illegal cigarettes hub.

In an interview with The Edge Malaysia, Tengku Zafrul was quoted as saying that his analysis has shown that the number of cigarettes consumed per capita – including by tourists – in duty free areas is just too high and does not make any sense.

He further noted that these duty-free areas can become a hub for illegal cigarettes trade.

In rejecting Tengku Zafrul’s claim, the Labuan Chinese Chamber of Commerce president Datuk Wong Kii Yii said such statement reflects badly on the Finance Ministry as well as the Perikatan Nasional Federal Government led by Prime Minister Tan Sri Muyhiddin Yassin.

“We would like to see for ourselves the Finance Minister’s so-called analysis that prove duty-free areas act as hubs for the illegal cigarettes trade,” requested Wong in a media statement.

“Based on our recorded sales numbers, Labuan sells a total of 300 million sticks of duty free cigarettes annually which is in tandem with local and tourist demand. This is a far cry from the Minister’s allegation of ‘high volumes’.”

Wong further criticised the Finance Ministry (MOF) for not only getting its math wrong but also being clearly misinformed on how illegal cigarettes syndicates operate.

“There needs to be a distinction between what is claimed to go into duty-free islands and what is sold in duty-free islands,” he pointed out.

“Once that is established, the right control is then to limit the quantity that goes into islands instead of removing the duty-free status completely.”

As such, Wong extended an invitation to the Minister and MOF officials to visit Labuan and investigate.

“Go ahead, audit us. Our members will be more than happy to cooperate. Our island is not that big; it will be hard to hide containers full of cigarettes.”

The Labuan Chinese Chamber of Commerce also opined that the national economy will suffer if excise duties are imposed on duty-free cigarettes based on MOF’s erroneous analysis.

“Cigarettes are one of the most popular retail items in any duty-free areas. Take it out of the equation and there will be a severe shortfall in retail income,” lamented Wong.

“Already Labuan’s economy has been hammered by the decline in the oil and gas sector. The COVID-19 pandemic and now, the new excise duties on duty free cigarettes, may just be the straw that breaks the camel’s back.” – Dec 2, 2020 

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