Don't disturb Labuan again
Published on: Thursday, August 25, 2016
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Labuan: The Labuan Chinese Chamber of Commerce (LCCC) welcomed the assurance by Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi that Labuan's duty-free status will remain unchanged.It said the decision was a "big relief" for Labuan which was already haemorrhaging from drastic contraction of the oil and gas sector.

Its Chairman Datuk Wong Kii Yii while thanking Zahid, hoped this decision is permanent so that businesses can continue without uncertainty.

Following the re-calibration of the National Budget 2016 early this year the Customs Department announced plans to limit, effective Aug 1, the sale, import and distribution of cigarettes, spirits (wines and liquor) and beer.

Under the proposed limits a non- Muslim adult can purchase no more than three reams of cigarettes, 5 pints of liquor and 3 cartons of beer and the number of importers of such items and duty free-shops would be reduced to 20.

The drastic action, also planned at two other free ports of Langkawi and Tioman, was due to revenue leakage of RM5 billion from rampant smuggling.

The move would have spelled doom to hundreds of shops here and triggered a public outcry with all quarters expressing concern. Member of Parliament Datuk Rosman Isli, accompanied by Chairman of Labuan Chinese Chamber of Commerce took up the key role to hold meetings with FT Minister Datuk Seri Tengku Adnan Mansor and Deputy Finance Minister Datuk Johari Abdul Ghani at Putra Jaya.

The meetings initially ended in a deadlock, with a Nov 1 deferred deadline to impose the curbs.

The chamber was unhappy that the action was merely deferred and continued to raise concerns.

This resulted in the Federal Cabinet deliberating on it and a Cabinet Committee or Task Force was formed.

It was headed by the DPM and the committee was also to look into several issues such as high cost of living, revamping the port and local jobs for local contractors.

Apart from the local leaders, other who lambasted the Customs proposal was former Chief Minister Tan Sri Harris Salleh who even said he regretted handing over the island to KL jurisdiction in 1984 when he was the Sabah Chief Minister.

He also suggested the island be given back to Sabah and that Chief Minister Datuk Seri Musa Aman would manage it even better.

Among the main arguments were that the island's duty-free status was part of its historical legacy, bestowed during British rule in 1884. The status was discontinued under Japanese rule but reinstated after the war in 1950 by the Bristish.

Whatever developments that had taken place in Labuan such as becoming a Financial Centre as well as an oil and gas hub had not been able to eclipse the importance of the duty free status. Investors and visitors come to Labuan because of the status.

Wong recalled that even former Prime Minister Tun Dr Mahathir Mohammad when visiting the island in 1997 saw the importance of the status for Labuan's economic survival and even increased the duty free shopping limit for certain items to RM300.

Wong said that if there were revenue leakages due to smuggling the problem was for the enforcement agencies to correct the weaknesses and improve efficiency.


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