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LANGKAWI: A hotel industry body today urged the government to reconsider the proposal to tax cigarettes and tobacco products sold on all islands duty free.
The Langkawi Chapter of the Malaysia Budget Hotels Association (MyBHA) said that imposing excise duties on cigarettes will likely deprive budget hotel owners, as well as retailers operating in these duty-free zones, of significant source of income.
Additionally, making cigarettes more expensive can incentivize criminal syndicates to smuggle cigarettes aimed at both locals and tourists. This can have negative socioeconomic consequences associated with the illegal cigarette trade.
“Most of our members have retail outlets or convenience stores that operate within their properties. By imposing taxes on popular consumables, sales volume and revenue will surely fall, ”said MyBHA (Langkawi Chapter) President Datuk Noorazly Rosly.
“Budget hotel operators are already close to closure as a result of the global Covid-19 pandemic. Every source of direct and indirect income is precious.
“We are hopeful that the government will not impose taxes that add to their hardships, but instead introduce initiatives that will help our members survive this ordeal and ultimately contribute to the tax-free economic growth of the islands.”
Noorazly also said that illegal cigarettes have never been a significant problem in tax-free islands like Langkawi.
“Why buy contraband products when legal products cost the same?”
“Imposing a tax on cigarettes on these islands means creating a whole new and virgin market for the illegal cigarette union. Given the current challenging operational landscape, we cannot afford to lose tourist arrivals due to unhealthy perception and experience, “he added.
In his recent speech on Budget 2021, Finance Minister Datuk Sri Tengku Zafrul said that cigarettes and tobacco products would be taxed on all duty-free islands and free zones that have been allowed. the retail sale of cigarettes duty free.
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