Duty-free shops upset with bank guarantee requirement

  • Nation
  • Monday, 07 Nov 2016

LANGKAWI: Duty-free shops here are unhappy with a new ruling by the Customs Department that requires them to deposit a bank guarantee for cigarette and liquor stocks in their premises.

Langkawi Chinese Chamber of Commerce chairman Lee Han Eng said the new ruling, which took effect on Nov 1, caused financial strain to traders who had to fork out up to RM1mil for the guarantee.

“This is the first time duty-free businesses here have had to place a bank guarantee with the department since Langkawi was accorded duty-free status in January 1987.

“They have to allot between RM250,000 and RM1mil, depending on their cigarette and liquor stocks, for the purpose,” he said yesterday.

Lee said only 56 duty-free shops, all owned by members of the chamber, were licensed to sell duty-free liquor and cigarettes from Nov 1.

“The licence is for two years. So the bank guarantee will be kept by the department for the duration.

“When the licence expires, the department will conduct a stock check again and decide on the new amount,” he said.

Lee said they had met MCA president Datuk Seri Liow Tiong Lai, Minister in the Prime Minister’s Department Datuk Seri Dr Wee Ka Siong and Deputy Finance Minister Datuk Lee Chee Leong in early September.

“We were told that the matter would be brought up at the Cabinet meeting,” he said, adding that duty-free shops in Labuan were also against the ruling.

Lee said that also effective Nov 1, each person was allowed to buy only three cartons of cigarettes, three cartons of beer and five litres of liquor a month.

Lee said the new policy meant that other outlets such as mini markets, sundry shops and coffee shops could only sell cigarettes and liquor that had already been taxed.

He said these outlets were given a two-month grace period until Dec 31 to clear their existing duty-free stocks.

There are about 400 mini markets and sundry shops here.

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