Its chairman, Dahlif Singh, called for a study to determine why the Labuan International Ferry Terminal is seeing fewer passengers.

“Such a study would reveal whether it is due to the erosion of Labuan’s duty-free status (in) the last two years, or stricter immigration checks introduced at the end of the last year,” he said, according to Daily Express.

Putrajaya started charging taxes on cigarettes and tobacco products on all duty-free islands, including Labuan, from Jan 1, 2021.

There is also a limit to the number and amount of non-taxable alcoholic drinks that can be taken out of Labuan, which was imposed in June.

Previously, travellers could take with them a maximum of six litres of alcoholic drinks, or a crate of 24 cans of beer, out of Labuan without being taxed.

The immigration department also implemented exit and entry checks on all visitors entering and leaving the federal territory on Nov 1, 2022.

From Nov 1, the ferry terminal’s fees will also be raised by RM3 for domestic routes between Labuan and Sabah or Sarawak, and by RM5 for routes to Brunei. This will lead to higher boat ticket fares for these destinations.

BA Holdings Sdn Bhd, which manages the terminal, said the hike was necessary as the fees were last revised 17 years ago.

Departures from the island’s terminal reportedly reduced to half over the past five years, from 416,000 in 2018 to just 211,285 last year.

Dahlif agreed that there were justifications for the terminal fee increase, but said this should mean better services and facilities, including air-conditioning.