Langkawi gets three-month tobacco tax reprieve

LANGKAWI: Business folk on the resort island are relieved after the Federal Government delayed imposing tobacco tax here until March 31.

Langkawi Chinese Chamber of Commerce chairman Lee Han Eng said the move would benefit many businesses, especially petty traders, in the already weak economy.

“Tourists who come to the island can still buy cigarettes at duty-free prices, ” he said.

Kedah is under the conditional movement control order and domestic tourism is allowed, though only Kedahans get to enjoy Langkawi for now.

Lee said that from April 1 onwards, anyone buying the old stocks of tobacco products in Langkawi – marked “duty not paid” – could still enjoy the duty-free prices and tax would only be imposed if visitors decide to bring them out to the mainland.

He said with the leeway, traders in Langkawi could still sell their old tobacco stocks.

“After April 1, new shipments of tobacco products to Langkawi will be the same price as those on the mainland, ” he said.

But Lee expects this new rule will have a negative impact on the already struggling economy in the archipelago, which relies almost exclusively on tourism.

He hopes the government will consider cancelling its decision and allowing Langkawi to remain as a place where cigarettes can be sold at duty-free prices.

Langkawi Business Association deputy president Datuk Alexander Isaac said the resort island faced a bleak future if the current MCO was prolonged.

“We cannot afford this to happen again. The island is just regaining its footing with the recent influx of tourists and now we have to face the lockdown for the second time, ” he said.

Alexander urged the government to review the imposition of duty on cigarettes sold in Langkawi.

He said even with the leeway extended, the business sector in Langkawi, especially tourism, was facing problems as several states in the country were placed under MCO which bans interstate travel.

A grocery shop owner, Ahmad Ishak, 67, said operators on the island fear that tourists, especially domestic travellers, would look elsewhere once the island loses its attraction as a place to get cheap cigarettes.

“We were known as a haven for cheap and quality cigarettes for more than 20 years.

“I even have regulars from as far as Johor who place bookings every year for their favourite tobacco, ” he said.

Ahmad said the decision would contribute to the increase in fake and contraband cigarettes on the island as people were more inclined to buy cheaper things nowadays.

He hopes the Federal Government will reconsider its decision to impose tax on tobacco and tobacco products in all duty-free islands and zones starting Jan 1, as announced under Budget 2021.

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