Scrap plans to tax ciggies in duty-free islands

THE Government must scrap ideas to impose taxes on cigarettes and tobacco products sold in duty-free islands or risk hurting the economy further.

“Imposing excise duty on cigarettes and tobacco products on duty-free islands would deprive budget hotel proprietors and retailers there an important source of income,” said the Malaysian Budget Hotel Association (Langkawi chapter) chairman Datuk Noorazly Rosly.

In the recent Budget 2021 speech, Finance Minister Tengku Datuk Seri Zafrul Tengku Aziz said the Government will be imposing taxes on cigarettes and tobacco products on all duty-free islands and any free zones which have been permitted retail sales of duty free cigarettes.

Pouring scorn on the idea, Noorazly said the move would only affect revenue of budget hotels and other retailers, who are already suffering due to the COVID-19 pandemic.

“Budget hotel operators are already pushed to near closure as a result of the pandemic. Every single source of direct and indirect revenue is precious now.

“Please introduce initiatives that will help our members survive this ordeal, and eventually contribute to the economic growth of duty-free islands,” he noted.

According to Noorazly, imposing such tax on duty-free island would only give rise to the sale of illegal cigarettes which is almost unheard of in those areas.

“Imposing a tax on cigarettes in these islands means we will create an entirely new market for contraband cigarettes.

“Given the challenging operating landscape, we cannot afford to lose tourist arrivals due to negative perception and experience,” he added. – Nov 16, 2020

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