Malaysian businesses say footfall has dropped by 10-30% in first week after VEP enforcement

MALAYSIA: Businesses in Johor Bahru reported a noticeable dip in customers over the first weekend after Malaysia began fully enforcing the Foreign Vehicle Entry Permit (VEP) on July 1.

Under the measure, all foreign-registered vehicles entering Malaysia must display a valid VEP tag or risk a RM300 (about S$91) fine. The vehicle entry system, rolled out in stages since October last year, is now mandatory for all incoming vehicles at the land border.

Malaysia’s Land Transport Department conducted a five-day enforcement operation at the Singapore-Malaysia checkpoints beginning July 1. Officials issued 190 summonses to vehicles without valid VEP tags, amounting to RM57,000 (around S$17,000) in fines.

The impact was quickly felt by retailers and restaurants in Johor Bahru, many of which rely heavily on weekend traffic from Singapore.

A business owner who runs a shop at Mid Valley Southkey Mall told a Malaysian daily that Saturday’s crowd remained healthy, but footfall visibly thinned by Sunday. “There were still a lot of people on Saturday, but on Sunday it seemed to have decreased,” she told local media, adding that the new VEP enforcement likely played a part.

A dim sum restaurant in central Johor Bahru reported a 30% drop in weekend business, significantly more than the 10% decline the owner had anticipated. The restaurant, usually packed with diners from across the Causeway, was noticeably quieter.

Overall, business operators interviewed estimated revenue fell between 10% and 30% over the weekend.

In anticipation of the policy’s impact, some shopping centres and businesses have already tried to cushion the blow. One mall set up a VEP installation point at its seventh-floor parking lot as early as October last year.

The measure has helped attract Singaporean drivers who need to register their vehicles, allowing them to shop while completing the process. The mall reported brisk activity over the past week, with many car owners coming to get their VEP tags installed.