THE Langkawi Chinese Chamber of Commerce (LCCC) has demanded for the Ministry of Finance (MOF) to reanalyse its data to justify its claims of categorising duty free areas as hubs for illegal cigarette and seeks clarity on the methods used to derive its figures.
Failure to do so may result in the island losing significant revenue with businesses going under, causing more job loss and income crunch.
LCCC vice president Ku Chin Loon said: “The numbers we have on record clearly shows that the volume of cigarettes sold and purchased within our island are well within reason. There is no market for illegal cigarettes in Langkawi and re-exporting duty free cigarettes back to the mainland does not make sense from a logistics, cost and risk perspective.”
“We urge the MOF to review its statistics carefully as well as clearly identifying the modus operandi of the illegal cigarettes trade in order to see that duty free areas have been wrongly implicated as black market hubs. Already tourism in Langkawi has taken a hit. The MOF’s incorrect analysis only stands to harm us further.”
According to Ku, retailers in Langkawi collectively agree that the Government should postpone the implementation of excise duties on duty free cigarettes until a proper study is complete.
“Retailers in Langkawi are also agreeable to comply with any additional measures that can further prevent potential mismanagement of duty free cigarettes,” he said.
These can include the imposition of tax on the importation of cigarettes with drawback facilities once they have indeed arrived for Langkawi market,” he added.
“By imposing tax on duty free cigarettes, every segment of society in Langkawi will suffer. In view of this potentially serious repercussion, we see no harm in the MOF taking a little bit more time to get the facts and figures right before implementing something so drastic. Why do we have to burn the whole forest just to get rid of some weeds?” he concluded.
This sentiment was recently echoed by Langkawi MP, Tun Dr Mahathir Mohamad during a Dewan Rakyat session, where he asserted that the implementation of excise duty on duty free cigarettes will negatively affect the tourism industry.
He further urged the Government to give special attention to development of Langkawi which is already severely impacted by the global health pandemic.
Meanwhile, Finance Minister Datul Seri Tengku Zafrul Aziz was recently quoted in an English business weekly saying that analysis has shown that the number of cigarettes consumed per capita, including tourists, in duty free areas is just too high and does not make any sense.
He also said that these duty free areas can also become a hub for illegal cigarettes trade. – Dec 4, 2020
