In commenting on the proposed amendments to Labuan’s duty free rules, Prof Hoo Ke Ping told FMT the island was already “dying” at present.
He explained that Labuan did not have much in the way of industry, services, small and medium enterprises (SMEs) or tourism, and this was why its current duty-free rules were good for the island.
“Times are bad around the world, and Labuan is also feeling the effects of the slowdown in the oil and gas industry,” he said, adding that placing restrictions on Labuan’s duty free rules would only result in reduced economic activity.
“The government should not fix what is not broken.”
Prof Hoo said the government should instead try to boost tourism on the island by promoting the industry around entertainment and lifestyle.
Similarly, SAPP deputy president Melanie Chia acknowledged that Labuan was weathering economic challenges brought on by the slowdown in the oil and gas industry, and that the proposed duty-free rules would be bad for the island.
She told FMT that when the Federal Government took over Labuan from Sabah in 1984, it promised to nurture and bring development and prosperity to the people there.
She said if Labuan’s duty-free rules were amended and no other measures were put in place to help the island’s economy, there was little merit for it to remain as a Federal Territory.
“Labuan deserves to be treated better than this. Instead of depressing the economy and depressing the Labuan people further, the Federal Government should urgently come up with concrete measures to help boost its economy.”
Last month, The Star reported that under the proposed new rules, liquor and tobacco products could only be purchased at 10 designated duty-free shops.
Additionally, all customer purchases would be recorded to prevent them from buying beyond their permitted monthly quota in an effort to curb the incidence of smuggling activities.
According to the report, the proposed monthly quota was three crates of beer, five litres of liquor and three cartons of cigarettes.
The new rules were set to take effect on Aug 1 but were deferred to Nov 1 following an outcry from various quarters.