He told FMT that Labuan’s duty-free status was a major source of income for the island.

“The sale of duty-free cigarettes and alcoholic drinks is what attracts people to come and buy more,” he said. “People come here because it is duty-free.

“These are the products which contribute to our income. We cannot impose the ban on cigarettes and alcoholic drinks as well.”

He was responding to the proposal raised by the Institute for Democracy and Economic Affairs (IDEAS) to ban the sale of duty-free cigarettes in these places to combat illegal trade.

The think tank said the previous government had admitted that the tax-free islands were a source for illicit tobacco but that proposals to ban the sale of duty-free cigarettes then were passed over in favour of restrictions.

However, Rozman cautioned that imposing such a ban risked upsetting the people.

“What matters for me now is Labuan’s economy. The current economy is already bad. I hope the government won’t impose a ban on the sale of these products as well.

“We want full duty-free status to be brought back, not banned.”

He said the only way a ban on the sale of duty-free items would be acceptable was if options were given to replace these products which would generate a similar level of income for the people.

He added that the illegal cigarette trade should prompt the authorities to improve their enforcement efforts.

“To combat illegal trade and smuggling is another issue. It is an enforcement issue relating to integrity. Not ours.”