Langkawi folk bemoan tobacco tax affecting tour industry

LANGKAWI: The imposition of the tobacco tax here has piled on more woes for the tourism industry here, on top of making the illicit cigarette trade more rampant, says Langkawi Business Association deputy president Datuk Alexander Isaac.

He said tourists, especially domestic travellers, no longer saw Langkawi as an attraction when cigarettes were no longer duty-free here.

“We must understand that Langkawi’s attraction is not just the beaches and hotels, but also as a haven for domestic tourists who want premium yet cheap cigarettes.

“Our archipelago has now lost some of its attraction and this causes more contraband cigarettes to be sold, ” he said.

Alexander said with the already dying economy, he foresaw that resorts here would plunge into another sorry episode.

He stressed that the island faced an uncertain future if the current situation was not improved.

Starting April 1, anyone buying the old stocks of tobacco products in Langkawi – marked with “duty not paid” – will still enjoy the duty-free prices and tax will only be imposed if visitors bring them out to the mainland.

But the new stock is no longer marked as duty-free and are sold at the same prices as those on the mainland.

The Federal Government announced under the Budget 2021 that it will impose taxes on tobacco and tobacco products in all duty-free islands and zones starting Jan 1.

The move was not well received by industry players and the Federal Government then delayed imposing the taxes until March 31.

Langkawi Chinese Chamber of Commerce chairman Lee Han Eng said most retailers had sold off their old stocks and new stock was being sold at the same prices as on the mainland.

He expected more illicit tobacco products to be on sale in the island.

“We know that contraband cigarettes were sold here before this, but with the tobacco tax, more will be sold.”

He pointed out many small traders and grocery shops had shut down due to the lack of visitors since the second movement control order was implemented early this year.

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