LANGKAWI: Many of the businesses selling tobacco products in Kuah have closed up shop as duties imposed on them meant that their prices are similar to other parts of the country, says Langkawi Tourism Association chairman Zainudin Kadir.
He said restoring its duty-free status could revive tourism in Langkawi, once a draw for bargain shopping.
Kuah, the island’s commercial and administrative centre and main ferry entry point, was previously a hub for duty-free tobacco sales.
“About 50% of tobacco shops have closed after losing price competitiveness following the imposition of duty.
“Jetty Point, once among the largest duty-free outlets, has stopped selling tobacco products,” he said yesterday.
Zainudin said duty-free shopping had been Langkawi’s main attraction since it was gazetted a duty-free zone in 1987.
But under Budget 2021, cigarettes and tobacco products have been made taxable goods in all duty-free islands.
On April 13, the Sultan of Kedah said during the opening of the state assembly meeting that the Federal Government should restore Langkawi’s duty-free status to jump-start the tourism sector and the island’s economy.
Among others, the Kedah Ruler said that the taxation on tobacco-based products have eroded the allure of Langkawi as a tourism destination.
Zainudin, when contacted, said that cigarettes and cigars were among the biggest retail drivers due to their broad appeal, but the policy change had weakened that pull.
He said domestic visitor numbers had dropped by about 53%, with ferry services reduced from eight daily trips to three.
Previously, he said, tourist arrivals comprised 70% foreigners while the rest were locals.
“Tourists from China, many of whom are smokers, represent a significant market,” he said.
Duty-free shop owner Loke Seng Chee, 52, said he stopped selling cigarettes after prices surged following the removal of duty-free status in 2021.
“A carton that used to cost RM65 jumped to RM180. As for tobacco products such as cigars, their price is three times more expensive,” he said.
He said the sale of the premium tobacco product has now plunged due to the duties that raised prices.
“Cigars that used to be priced RM50 or RM100 each now costs RM150 and RM300,” he said.
He acknowledged that there was still demand for cigars, especially from deep-pocketed clients.
“But for the average smoker, they stopped buying when the prices went up,” he said.
“I now focus only on liquor,” he added.
Another shop owner, Nurul Hidayah Osman, 41, said footfall had dropped by about 40%.
“Customers used to buy cartons. Now, many would walk away after checking the prices,” she said.
