Move to control businesses in Labuan to prevent leakages, says Najib

Prime Minister Datuk Seri Najib Tun Razak said the move to control the operations of alchohol, cigarette and luxury car outlets in the tax-free island of Labuan and Langkawi is aimed at plugging leakages and minimising contraband issues.

He said the government incurred losses of RM1 billion in tax revenue as a result of leakages in Labuan and with controls in place, as announced in the recent recalibrated 2016 Budget, the problem can be arrested.

"This leakage is due to the misuse of the tax-free status accorded to the sale of cigarrettes, alchohol and luxury cars. I don't blame the people of Labuan. This could be the work of syndicates.

"So, we will make changes where it is necessary. We will still continue to accord tax-free status but control the operations of these outlets. Those with a good track record will continue to enjoy benefits," said Najib, who is also Finance Minister, at the opening of the Labuan Urban Transformation Centre here on Saturday.

With these controls in place, the prime minister said government revenue would improve and better facilities can be accorded to the people.