Duty-free island cigarettes and tobacco products will be taxed next year
(Kuala Lumpur, 30th) From January 1, 2021, the Customs Service will begin to deal with all domestic duty-free islands, namely Langkawi, Labuan, Tioman, Pangkor Island, and all cigarettes and tobacco products in the free zone (retail industry). E-cigarettes, and non-electronic products, including non-nicotine e-cigarettes and gels used in e-cigarettes.
This also means that from January 1 next year, tourists who buy cigarettes and tobacco products in the above-mentioned areas will no longer enjoy tax-free concessions. In addition, the Customs Bureau will start from April 1 next year to levy taxes on cigarettes and tobacco products imported from foreign countries and purchased from duty-free shops by local or foreign tourists through various modes of transportation.
Datuk Seri Abdul Radiff, Director of the Customs Department, announced the matter in a statement this morning. He said that starting from that date, the tax-free concessions for cigarettes and tobacco products enjoyed by tourists in the aforementioned areas will no longer apply.
In addition, he stated that surplus tobacco products imported into duty-free islands and free zones (retail business) before January 1 next year can be stored, owned, sold and disposed of on the islands and zones. He said that starting from that date, the remaining cigarettes and tobacco products marked with red tax stamps that have not paid Malaysian taxes should be taxed before they are shipped to the main customs area.
No more licenses
After the government announced that it would freeze cigarette import licenses from 2021, the Customs Bureau will no longer issue relevant licenses from January 1 next year, but existing license holders can still renew. Abdul Radiff, in order to strictly enforce the renewal of cigarette import licenses, existing license holders must comply with the additional conditions set by the authorities for the minimum cigarette import volume within 12 months.
In addition, he said that starting from the above date, all cigarettes, tobacco products, e-cigarettes and non-electronic products, including nicotine-free e-cigarettes and gels used in e-cigarettes, will only be transported in certain ports. The transshipment and re-export of such items by boat is also not allowed.
Ports that allow the transshipment of the above items:
- * West Port Klang, Selangor
- * Klang North Port
- * Port of Tanjung Pelepas, Johor
- * Sandakan Port, Sabah
- * Senari Port, Sarawak
He said that transshipment activities are only allowed to use international standard containers for full container loading, and any activities related to loading bulk cargo are not allowed.
He stated that the authorities allow export and transshipment activities by land, but must comply with the conditions set by the authorities, that is, import through the above five designated transshipment ports, direct from designated transshipment ports to the final overseas destination, and comply with the 1967 Customs Service. Decree, 2019 Customs Service Regulations and the policy provisions of the Bureau.
In addition, he said that tax rebates for re-exports of such items are only allowed in free trade zones and must comply with the regulations of the authorities. According to Article 93 of the Customs Service Act 1967, re-exports of goods shall be subject to self-pay tax Within 3 months from the date of export, and tax refunds should be made within 3 months from the date of export.