Home Politics Asia Malaysia Will Not Issue New Cigarette Import Licences in 2021

Malaysia Will Not Issue New Cigarette Import Licences in 2021

Customs DG Datuk Seri Abdul Latif Abdul Kadir, has recently announced that as of this January, no new import licences for cigarettes will be issued by the Royal Malaysian Customs Department.

Diane Caruana

January 16, 2021

Last November, Malaysia’s Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, had announced an excise tax on all tobacco products and electronic/vaping products. The excise duty is at a rate of 10% of the value of the products and one of 40 sen per ml on e-liquids. “Electronic cigarettes liquid too will be subjected to an excise duty at a rate of 40 sen per millimeter,” said the Finance Minister during the tabling of a 2020 budget session.

“..duty exemption on cigarettes and tobacco products for visitors and tourists will no longer apply from Jan 1, 2021.”

The tax has now gone into effect, and is imposed on cigarettes and tobacco products on all retail zones and outlets in Duty Free Islands (DFI), namely Langkawi, Labuan, Tioman and Pangkor and retail business free zones. The free commercial zones involved under Section 6A, Free Zones Act 1990 are those located in Stulang Laut, Johor; Rantau Panjang and Pengkalan Kubor in Kelantan and Bukit Kayu Hitam, Kedah. “As such duty exemption on cigarettes and tobacco products for visitors and tourists will no longer apply from Jan 1, 2021,” said Abdul Latif.

Moreover, he added, while existing import licences may be renewed, the issuance of new cigarette licences has now been frozen, and new restrictions on the licensing process are in the works. “To tighten the renewal of Cigarette Import Licence, the additional conditions for importing the minimum quantity of cigarettes that have been set within 12 months must be adhered to.”

Import and export activities will be limited to five ports

Abdul Latif also pointed out that transit activities will only be permitted through five ports; West and North Port in Port Klang, Selangor; Tanjung Pelepas Port, Johor; Sandakan Port, Sabah and Senari Port, Sarawak.

Activities for exports purposes by road will also only be allowed via the same five ports, and travel from the transhipment port will be set directly to the final destination abroad, in compliance with the provisions of the Customs Act 1967, Customs Regulations 2019, as well as current department policies.

Moreover he added, transhipment and re-export of the products by small boats has been banned, and the imposition of tax on cigarettes with drawback facilities for re-export, will only be allowed in the free zones subject to Customs’ discretion.

“International Organisation for Standardisation containers must be used for transhipment activities and they must only be full container load shipment as breakbulk activities are not allowed,” explained Abdul Latif. He said that any remaining stock that had been imported into the DFI and FZ before Jan 1, 2021, may be stored, owned, sold and disposed of in the same DFI and FZ.

Read Further: The Malaysian Reserve