Labuan: Member of Parliament Datuk Rozman Isli (pic) said Labuan can expect some measures to stem the loss of some RM1 billion in leakages arising from its duty-free status."I was told the government would restructure its mechanisim in dealing with leakages.
"I believe new or more measures will be put in place to allow rigid monitoring of import/export , wholesale and retail of all activities related to cigarettes and liquor trade," he said.
Rozman thanked Prime Minister Datuk Seri Najib Razak for sparing Labuan's duty free status when reviewing the 2016 Budget on Thursday despite concern over the RM1 billion loss via leakages.
"It clearly shows that the PM has deep understanding of Labuan and his concern of the negative impact on Labuan's economy if the status was abolished." said Rozman.
Instead of removing the status the recalibrated budget would now see new measures imposed to curb the leakages from Labuan, he said.
"There is a need for stronger enforcement capacity and operational efficiency," he said, adding that the onus was on the Customs Department with support from the other agencies.
In the recablirated 2016 Budget, the government will restructure the sales channel of cigarettes and liquor limited to duty-free outlets licensed by the Customs Department.
The island here is one of three duty-free zones in the country. The two others are Tioman in Pahang and Langkawi in Kedah.
Rozman said if Labuan had to give up the duty free status, its fortunes could only get from "bad to worse".
"As it is, we are badly affected by the drop in upstream oil and gas activities in Sabah and Sarawak.
Labuan can't afford to rely on the oil and gas industry.
"We had, in the last couple of years, put in a lot of effort to boost our tourism industry, and the duty free status plays a big role in attracting visitors and investors," he said.
Rozman said there were a few major tourism-related developments in the pipeline for the island and if the status was abolished, the plans could be derailed.
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