Pulau Satu in Forest City will exempt chocolate, alcohol, cosmetics and perfumes from taxation, for starters.
Malaysia has passed regulations that will declare Pulau Satu island in Forest City a full duty-free zone as part of efforts to revive the struggling megacity.
While these tax-free provisions will add to the appeal of the 2,800ha development – more than 5½ times the size of Singapore’s Sentosa island – it remains to be seen if the slew of measures over the years will inject more life into the project that has been dubbed “ghost city” due to its largely empty condominium units.
Deputy Finance Minister Lim Hui Ying, while tabling the Bills last week, said the whole of Sources close to the matter told The Straits Times that more items could be added to the duty-free list after the Bills are deliberated and passed in the Upper House by Aug 1 and have received royal assent.“Duty-free sales in Forest City could, in principle, generate more foot traffic to the island. However, this will not address the overhang in apartments,” Dr Francis Hutchinson, senior fellow and coordinator of the Malaysia Programme at ISEAS - Yusof Ishak Institute, told ST.
However, the project has encountered setbacks ranging from environmental protection issues, China’s tightening capital controls that have stymied funding for buyers, the Covid-19 lockdown and a near-miss default coupon payment by Country Garden in September last year. “A duty-free zone is definitely a boost for local SMEs and retailing sectors,” Mr Teh, who has 25 years of experience in the Johor Bahru manufacturing sector, told ST.
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