LABUAN: The levy of 10 per cent sales tax on Low Valued Goods (LVG) below RM500 sold on online platform and imported via land, sea or courier which became effective on Jan 1 should not apply to Labuan.

Labuan Indian Commerce and Industry Chairman Datuk Dahlif Singh said it should be remembered that Labuan is a duty-free port and whether it is low or high valued goods imported from anywhere, by virtue of the island’s status, it stands exempted from sales tax or customs duties.

He noted that the island’s duty-free status had already been curbed with the withdrawal of tax-free cigarettes and restriction on the purchase of beer and liquor by tourists.

“The new LVG tax would mean a further erosion of the special position on the island and a burden to many who purchase through online due items not available here or costly and not of updated model.”