Why so many licences for one coffee shop?

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An opposition Member of Parliament has questioned the government’s move in enforcing a policy requiring coffee shops to apply for separate licenses to sell several items, including cigarettes and alcoholic drinks.

Former Dewan Rakyat deputy speaker Nga Kor Ming (Pakatan Harapan-Teluk Intan) said such enforcement would burden the operators who in turn would increase prices of goods sold at their shops.

“Currently, if a coffee shop wants to put up a signboard, they have to apply for a licence, that’s one. Then, another licence (is required) to sell cigarettes and another one to sell alcoholic drinks.

“How many licences does a coffee shop need? Why is it that during a time when the people are struggling due to the rising prices of goods, the government decides to add more bureaucracy and costs which eventually will burden the people?

“The cost of one licence is RM1,340, which means these costs will be passed on to consumers, making the current price hike issue becoming even more serious,” he said in the Lower House today.

For the record, the policy by the Royal Malaysian Customs Department under the Excise Regulations 1977 has been in Malaysia for decades but Nga pointed out that the requirement has never been enforced despite it having existed since 1977.

Deputy Finance Minister 1 Mohd Shahar Abdullah, however, did not provide a response to this query.

On Nga’s specific question about the policy requiring coffee shops to apply for a separate licence to sell beer, Shahar said this decision was not unique to Malaysia.

“About the increase in prices of tax regarding alcoholic drinks, this is not only practised in Malaysia. In fact, this is also practised in other countries, including our neighbours,” Shahar said.

Nga had also asked Shahar about the government’s plans to stop illicit cigarettes from entering the country, saying that 62 percent of the world’s illicit cigarettes are sold in Malaysia.

With such an alarming figure, Nga urged the government to look for ways to address the issue which he said was largely caused by corruption and high tax rates.

To this, Shahar said the government is aware of the problem and is currently making efforts to resolve the issue by establishing a Multi-Agency Task Force (MATF), consisting of several enforcement agencies.

“The government is tightening control on transhipment activities at our ports so that, as pointed out by Teluk Intan, Malaysia would not be seen as a hub for illicit cigarette transhipments.

“This includes limiting cigarette transhipment activities to only five ports in Malaysia, which are two in Port Klang, the North and West Ports, Tanjung Pelepas Port (in Johor), Senari Port in Sarawak, and Sepanggar Port (in Sabah).

“We impose a tax on imported cigarettes for the purpose of re-export before we allow the drawback and we give a tax refund, not 100 percent, but only nine out of 10.

“This firm action is one of the government’s serious efforts to reduce leakages in tax revenue due to the misuse of tax-free shop facilities that are difficult to control,” he said. – NST