The enforcement measures are intended to control the act of celebrating Christmas excessively and openly, which could damage the aqidah (faith) of the Muslim community, according to Brunei's Ministry of Religious Affairs (MoRA).
The statement also warns Muslims not to participate in Christmas celebrations, which includes "wearing hats or clothes that resemble Santa Claus."
Partaking in such actions is now an offence under Section 207 (1) of the penal code, which is punishable by a fine of up to $20,000 and an imprisonment of up to five years, or both.
Meanwhile, the statement said non-Muslims could celebrate their religious festivities among their community but may not disclose or display them publicly to Muslims. Doing so would violate Section 209 (1) of the penal code which prohibits propagating religion other than Islam to a Muslim.
The statement claims that most businesses have reacted positively to the move and pledged to cooperate fully with the government.
Yet, according to The Diplomat, new curbs on Christmas celebrations have in fact already led to discontent among some people in Brunei.
The Facebook page Boycott Brunei, which advocates repealing Brunei's new penal code, published several excerpts of comments from Bruneians in online discussion forums explaining their opposition.
"If you have strong faith, nothing in this world can shake it. They make it sound like the moment you see one Christmas tree or deco you'll go convert to Christianity right away. That's so stupid, wrote one Bruneian.
"I hope this is not a sign of things to come. Clearly there are individuals in the country who want nothing more than to turn Brunei into [Saudi] Arabia. These actions will do little to improve our image overseas and if more widely known would critically damage our international reputation," said another.
The latest move comes after Brunei's Sultan Hassanal Bolkiah announced in April last year that he would push ahead with the introduction of a new criminal code which sparked rare domestic criticism of the fabulously wealthy ruler as well as international condemnation.