Promises are being made that Penang will get back its free port status if certain political parties are elected. Guest writer SamG exposes the ‘free port’ myth.
Both Barisan Nasional and Pakatan Rakyat have promised Penang free port status. Does it sound too good to be true? Another hollow promise by Penang BN?
Before I am questioned, how did the Free Port status work before 1970s? Simple, there were little taxes and duties for cigarettes, cars and alcohol. Going across to Province Wellesley was a big event, let alone to cross the borders to other states like Kedah or Perak. Times have changed, taxes have gone up and lifestyles have changed completely since then.
The question is what exactly will be put in place. There are several possibilities:
a) A replica of Langkawi and Labuan which covers cigarettes, alcohol and cars.
b) A limited “Free Port” status where, these three key products, i.e. cars/alcohol/cigarettes would not enjoy “tax-free” or duty free status.
c) Another point, which has not been discussed, is the 6 per cent service tax we are paying for Telekom, mobile phones, Astro, restaurant bills, McDonalds, KFC, legal fees and everything that attracts the tax.
d) Will only Penang Island enjoy this status or will it include the entire Penang state (Island and Seberang Perai)?
e) Technically Penang Island port only handles passenger/cruise liner traffic and not goods shipments. All goods are routed through the port on the mainland. Hence the whole port area should be declared duty free
I really don’t have the figures on how many CBU cars are sold in Penang. If Penang gets CBU cars tax free, Proton and Perodua sales in Penang would collapse. It really does not matter, whether islanders or mainlanders can benefit, as a large portion of mainlanders would have their addresses changed to the island some way or another.
On the other hand, if the entire Penang state is the Free Port Zone, then it is another infrastructure for a Kastam DiRaja Malaysia nightmare.
In Singapore and Johor, where hundreds of thousands of people cross the border each day, there are basically only two crossings. The main products which would be of interest are cigarettes and petrol. Singapore has imposed tight controls.
In Penang/Kedah and Penang/Perak we have a totally porous border. Hence the entire northern region would be fed by smuggled goods from Penang. Once again bearing in mind the billions of ringgit losses for the federal government, it would mean other sectors would suffer from inadequate development funds.
Assuming to the government decided to only consider the island for this special free port status, does that mean all car dealers, pubs and cigarette sellers in Seberang will end up going bust? With so many crossing the bridge, why drink or smoke duty-paid stuff? How would the small mini markets, supermarkets and hypermarkets in the bordering towns survive? The government would be destroying communities in all the small towns.
With 140000 plus cars using the Penang Bridge, do we have to go through customs check everyday? Can you imagine the traffic chaos going to work? If cars are duty free, do we have to declare our cars everytime we leave Penang? How is it possible to track all the cars of Penangites who live and drive outside the state? This proves once again it is all a fiasco.
So it looks like the free port status is only going to cover raw materials used in manufacturing. That too most companies have licensed manufacturing warehouse status for export goods/raw materials.
The whole free port talk is just crap. I feel it is a total sham and scam from both sides.