Provide tax initiatives for all types of businesses in Labuan — Anifah

KUALA LUMPUR: The government should provide tax initiatives for all types of businesses in Labuan, said Senator Tan Sri Anifah Aman.

Speaking at the Dewan Negara, Anifah said that the only way to boost the economy of Labuan is to welcome investors.

“Currently, only 23 types of businesses governed by the Labuan Financial Services Authority (LFSA) enjoy a three percent tax rate.

“Why not extend this privilege to all businesses in Labuan? That way, people will come in and invest in Labuan, spurring the economy,” said Anifah.

He also said that the island’s duty free status must be revised to ensure that it is fully duty free again.

“Back then, Labuan was a fully duty free island. Now there have been many changes in policies made by the previous government.

“Its current status as a restricted duty free island is one of the reasons for the poor economic conditions there,” he said.

He added that allowing a three percent tax rate on all businesses, it can be a stepping stone towards making the island a fully tax-exempt island.

The poor economic conditions and the difficulties in finding jobs on the island have caused people to call for Labuan to be returned to the Sabah State Government because people feel like they have been sidelined by the Federal Government.

“People in Labuan feel like they are stepsons and stepdaughters. Labuan was supposed to be developed like the other federal territories but it wasn’t,” he added.

Meanwhile, Anifah also spoke on the importance of upholding the Federal Constitution to ensure its full implementation for the benefit of Sabah, Sarawak and Labuan.

He added that this was in accordance with the recent Royal Address by the Yang diPertuan Agong Sultan Ibrahim ibni Almarhum Sultan Iskandar who convened the opening of the third session of the 15th Parliament.

“It is important to adhere to the Federal Constitution as the supreme law of the nation,” said Anifah, whose sentiments was echoed by fellow Senator Datuk Dr Mujahid Yusof Rawa.

Drawing attention to specific provisions within the Federal Constitution, Anifah pointed out Article 112C and Schedule 10, which stipulate that the federal government must allocate 40% of federal revenue collections to the state governments of Sabah and Sarawak.

“The interim payment of RM300 million to the Sabah government is very welcome.

“However, what else are we waiting for? The Constitution is clear. The 40% is clear,” he added, raising concerns regarding the ongoing discussions on the implementation mechanism.

Anifah also asked the Federal Government to allow the Sabah State Government to issue its own manufacturing license for investments of up to RM100 million.

“Currently, the Sabah State Government can only issue State Government approval for investments below RM2.5 million.

“Do you know that the cost to set up a McDonald’s outlet is already RM2.8 million?

“So can’t Sabah approve manufacturing licenses above RM2.5 million? he added.

Senator Pele Peter Tinggom urged the government to conduct a re-delineation exercise for Parliamentary seats in Sabah and Sarawak to enhance economic growth and development in both states.

He said this was important as it could promote infrastructure development in these areas through allocations provided to parliamentary constituencies, thereby expediting administrative processes.

“Imagine parliamentary constituencies like P220 Baram under MP Datuk Anyi Ngau, which is as large as the state of Pahang. Similarly, parliamentary constituencies like P216 Hulu Rajang under MP Datuk Wilson Ugak Kumbong - which is almost as large as Pahang.

“If constituencies like these are divided and additional parliamentary seats are added, planned infrastructure and economic development will reach the people directly and even faster than the current situation,” he said.

According to Pele, the redelineation process needs to be done immediately, especially since the current Unity Government is supported by Sabah and Sarawak with a twothirds majority in Parliament.

“This is to rectify what is necessary for balanced prosperity as stipulated in the Federal Constitution and the Malaysia Agreement 1963 (MA63),” he said.