KUALA LUMPUR (Dec 12): Malaysia continues to focus on efforts to strengthen industry competitiveness, expertise development and shariah cooperation.

The country aims to strengthen its value proposition, particularly as a global gateway for the Islamic financial market in Asia and member countries of the Organisation of Islamic Cooperation as outlined in the Financial Sector Plan 2022-2026.

Deputy Finance Minister Lim Hui Ying said the efforts include continuous support by Bank Negara Malaysia and industry players for countries that want to develop Islamic financial networks through the sharing of Islamic financial knowledge.

"For example, the International Centre for Education in Islamic Finance (INCEIF University) and the Islamic Banking and Finance Institute Malaysia (IBFIM) recently organised an Islamic finance programme for Uganda and the Philippines for them to learn more about Malaysian Islamic banking and takaful.

"In addition, Malaysian Islamic banking and takaful industry players are also actively expanding their operations and penetrating new markets, especially in the regional market," she said during a question and answer session in the Dewan Rakyat here on Thursday to a question from Datuk Mohd Shahar Abdullah (Barisan Nasional-Paya Besar), who asked her to state what strategic partnerships or collaborations are currently underway with major players in the Islamic finance industry to expand Malaysia's reach and influence, given the growing demand for Islamic financial products and services at the global level.

Lim said industry players, through concerted efforts led by the Malaysian International Islamic Finance Centre (MIFC) Leadership Council, had also signed a memorandum of collaboration with Indonesia, Hong Kong, Türkiye and the UK in May last year, placing an emphasis on the innovation of Islamic financial products, encouraging cross-border trade and financial activities, as well as promoting capacity building and education. 

"This collaboration is followed by a specific business forum between Malaysian and UK industry players, in an effort to promote green investments with the wider application of Islamic financial solutions," she said.

Meanwhile, in reply to a question from Datuk Dr Suhaili Abdul Rahman (Perikatan Nasional-Labuan), who asked if there was a possibility that Labuan's tax-free status could be restored to what it was before Labuan became a Federal Territory in 1984, Lim said Labuan's status as a tax-free island (PBC) is still in effect.

"The move to reimpose taxes on cigarette and tobacco products on all PBCs effective from July 1, 2021 is one of the government's efforts to curb the smuggling of high-duty goods and deal with the problem of large leakages of tax revenue, especially as a result of the abuse of PBC status by parties who are not responsible for bringing in cigarettes and tobacco products into the country illegally.

"Since the government implemented measures to tighten the control of the importation of cigarettes and tobacco products, in particular by limiting the transhipment activities of these products to certain ports only, incidents of illegal cigarettes in the local market had decreased by 9.4% from 2020 to September 2024. This shows that such measures also help in reducing the leakage of tax revenue," the deputy minister said. 

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