Zahid opposes move to change Labuan's duty-free status

Bernama PIC

LABUAN: This international offshore financial centre should not be penalised for smuggling of duty-free goods from the island, Datuk Seri Dr Ahmad Zahid Hamidi said.

The Deputy Prime Minister said he will personally oppose any move to abolish or change the island's duty free status.

"Labuan’s duty-free status will be maintained and if there is any problem with smuggling, the way to address it is to improve enforcement," he said when launching the Labuan Umno meeting here.

“It will be wrong to victimise the people of Labuan for something that is not their doing,” Dr Ahmad Zahid added.

Labuan leaders, including MP Datuk Rozman Isli, had cautioned against any move to curb the island’s duty-free trade by limiting the number of outlets selling items such as alcoholic drinks and tobacco products.

Rozman said any such move would cause a backlash for Labuan’s economy that was already suffering due to a slowdown in the oil and gas sectors.

Dr Ahmad Zahid later told the media that a special task force that he is chairing to turn around Labuan’s economy will meet Finance Ministry and Customs Department representatives to discuss ways to curb smuggling activities here.

He said the task force, which would include Rozman as well as former MPs Datuk Suhaili Abdul Rahman and Datuk Yusof Mahal, will find ways to transform the island’s economy that is currently dependent on the oil and gas industry and tourism.

The task force will hold its first meeting next month, he added.