KUALA LUMPUR – The proposed excise tax on cigarettes and tobacco products in duty-free areas will cause a negative multiplier effect for the Malaysian economy, said retailer The ZON Duty Free (The ZON).
Director Ong Bok Siong, in a statement today, said the move will not only impact retailers’ revenue, but also discourage tourists from visiting such areas, threaten jobs held predominantly by the B40 group, and de-incentivise foreign and local investments.
“Clearly, it is the wrong time to impose an excise duty on cigarettes and tobacco products in duty-free areas. These products are very popular with international and domestic travellers, and form a significant part of a duty-free retailer’s revenue.”
The ZON is a member of the Atlan Holdings Bhd group of companies, one of the largest duty-free retail groups in Malaysia.
When tabling Budget 2021, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz said taxes will be imposed on cigarettes and tobacco products on all duty-free islands and in zones permitted to sell the items duty-free.
If the industry’s revenue stream is pressured further, some duty-free retailers may be forced to reduce their workforce or shut down, said Ong.
“Surely, this outcome is misaligned with the federal government’s aim to reinvigorate the economy, which has been hurt by the (Covid-19) crisis.
“The focus now should be on assisting businesses to get back on their feet, so that they can, in turn, contribute positively to rebuilding our economy.” – Bernama, November 20, 2020
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