Home Asia Featured News Tengku Zafrul: Govt targets shadow economy, no more selling of duty-free cigarettes

Tengku Zafrul: Govt targets shadow economy, no more selling of duty-free cigarettes

Cigarettes are one of the items in the shadow economy in

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KUALA LUMPUR, Nov. 28 — The announced several measures to improve revenue collection including from the shadow , Minister Datuk Seri Tengku Zafrul Aziz said.

This would mean that there will be no more selling of duty-free cigarettes on duty-free islands.

“So, no more selling duty-free cigarettes on duty-free islands where sometimes becomes a hub.

“We did an analysis – how come so many can on this island? doesn’t make sense, the number of cigarettes per capita, including , is just too high,” he said in a report in The Edge today.

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He said that at the moment the government is also looking at reducing leakages and one of the methods is to curb illicit smuggling of high-duty goods.

“Cigarettes are one of them. The shadow economy in averaged 21 per cent to (gross domestic product) between 2010 and 2019. That’s a big number,” he said.

He recalled that in 2019, it went down to 18.2 per cent of – still a big number as nearly 20 per cent of is from the shadow economy.

“So this provides a sizable income to the government if it’s regulated properly,” he said.

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When commenting on whether there are plans to bring back the goods and services (GST) or introducing capital gains (CGT), Zafrul said while these would be the fastest ways to achieve percentage share of GDP of 2015-2019 numbers, the timing is not right to introduce both taxes.

“But once the economy has recovered, that’s something we need to discuss,” he said.

As for CGT, Zafrul said it is one of the taxes that is being looked at but it is not the right time to introduce it as it is more sensitive to the markets, companies and others.

“We are expecting higher collection from investment income in .

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“We hope that the government companies will improve their investment income from next year,” he said.

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