Which goods will still be subject to tax on Pangkor Island?

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Goods Subject to Tax on Pangkor Island

Pangkor Island is set to become a duty-free zone from January 1, 2020, which will also include an exemption from the Sales and Services Tax (SST). However, this tax-free status will not apply to all goods. Specifically, tobacco, alcohol, and vehicles will remain subject to taxation even after the island achieves its duty-free designation.
Exceptions to Duty-Free Status

The exemption from duties and SST for Pangkor Island was initially announced during the tabling of Budget 2018 by the federal government, then under Barisan Nasional. While the intention is to boost economic activity and tourism, certain categories of goods have been excluded from this special status.
Specific Taxable Items

The goods that will continue to be taxed on Pangkor Island include tobacco products, alcoholic beverages, and motor vehicles. This means that while many other items may become available without duties or SST, these three categories will still incur the relevant taxes.
Rationale for Exceptions

Although the specific reasons for excluding tobacco, alcohol, and vehicles were not detailed in the announcement, such exceptions are common in duty-free zones. These exclusions are often implemented for public health reasons, to prevent illicit trade, or to maintain revenue streams for the government on high-value or controlled items.
Implementation Timeline

The transition for Pangkor Island to become a duty-free zone is scheduled to take effect on January 1, 2020. The state government has been undertaking efforts to finalise the necessary gazetting procedures to implement this change.

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Which goods will still be subject to tax on Pangkor Island?

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