LABUAN: The Labuan Chinese Chamber of Commerce has called on the Ministry of Finance to review what it calls the “unfair and suffocating” export taxes imposed by the Royal Malaysian Customs Department, which are applied without discretion and undermine the island’s duty-free status.
Chamber Chairman Datuk Wong Kii Yii said the Customs imposed export taxes on all items, including cooked or uncooked food, parts, and supplies, even when they are intended for use by supply boats, oil rigs, or crew members.
These items are treated as exports and subjected to taxation.
Wong said this was ridiculous as there was no real export to a foreign port but transfer from Labuan to vessels anchored to close port limit and for the vessels’ exclusive use in support of oil and gas activities.
He added that several companies had lodged complaints, stating that the duties create unnecessary hassles and increase operational costs — an outcome unexpected for a port with duty-free status.
Wong further observed that most vessels prefer using Labuan port due to its duty-free advantage, but the benefit is lost if operating costs exceed those of duty-paid ports.
He also recalled that over a year ago, Prime Minister Datuk Seri Anwar visited Labuan, acknowledged the island’s economic concerns, and directed relevant ministers, including Director-Generals, to conduct regular visits to address these issues and revitalise the economy.
“Unfortunately, more than a year later, despite a series of ministerial visits, the economy remains in ICU,” Wong said.
He hoped that the Labuan Task Force, chaired by Labuan Corporation Chairman Datuk Mohd Husni Mohamad Salleh and Deputy FT Minister Datuk Lo Su Fui, would address the oil and gas sector’s concerns regarding export taxes and resolve the matter satisfactorily.
Wong said that Labuan’s free port status is a British legacy and should not have been tampered with in the first place.
