Malaysia has announced a 770-acre islet in Johor's Forest City to become a duty-free island with special tax provisions to boos economic growth in the area.

The announcement came after Malaysia approved five Bills over the Pulau Satu island on Wednesday as part of the beleaguered USD 100 billion development.

The Bills involve amending customs, excise (an indirect tax charged by the government on the sale of a particular good or service), free zones, sales and service tax laws. They were tabled by Deputy Finance Minister Lim Hui Ying for a third reading and passed through a voice vote.

They are the Customs (Amendment) Bill 2024, Excise (Amendment) Bill 2024, Free Zones (Amendment) Bill 2024, Sales Tax (Amendment) Bill 2024, and Service Tax (Amendment) Bill 2024.

Once the relevant laws are amended, Pulau Satu will join the likes of other duty-free islands in the country such as Labuan, Langkawi, Tioman and Pangkor.

Local media reported that Mdm Lim said that the existing laws governing other duty-free islands would also apply to Pulau Satu, including the requirement for visitors to stay on the island for at least two days to qualify for duty-free products.

She said the Bills aim to boost trade, attract investments and stimulate economic activity in the region, as part of administrative capital Putrajaya’s plans to create a special financial zone in Forest City to foster investment and economic growth in Johor, Free Malaysia Today reported.

Several members of parliament participated in the debate on the Bills, which were met with some pushback and queries.

Forest City is currently classed as a duty-free area, a status it was granted in 2016. With the recent Bills amendment, Pulau Satu’s status will change and it will be gazetted as a duty-free island.