No tourism tax for Malaysians

PETALING JAYA: Malaysians holidaying in the country can heave a sigh of relief as they will not be hit by the new tourism tax.

This came after the Government decided to only impose the tax on foreign tourists at a flat rate of RM10.

Tourism and Culture Minister Datuk Seri Mohamed Nazri Abdul Aziz told Parliament yesterday that the tax, which is expected to take effect from Aug 1, would apply to all hotel categories and be charged per room per night.

However, it will not be applicable for premises with five rooms or less, homestays and village stays.

Nazri also said the Prime Minister would decide whether to push back the implementation date to beyond Aug 1.

Initially, locals were only supposed to be exempted if they stayed at hotels rated three stars and below, while foreigners were to be charged between RM2.50 and RM20 per night depending on the hotel’s rating.

The decision to exempt locals, said industry players, would benefit and enhance domestic tourism.


Malaysian Association of Tour and Travel Agents (MATTA) president Datuk Tan Kok Liang said the exemption would stabilise the local tourism sector.

“MATTA has expressed concern over the tourism tax and we are glad that the Government has taken note,” said Tan.

“Also, reducing the tax from RM20 for four- and five-star hotels to RM10 will minimise the adverse impact on the high-end industry.”

He also said there would be minimal impact on foreign tourists, adding that the extra funds collected would be spent on tourism infrastructure development.

Tan, however, said there was a need to review the lower category accommodation providers and budget hotels.

“There could be an increase of between 5% and 30% for room rates due to the tax, which would affect long-stay budget travellers,” he said.

He also expressed hope that the Customs Department would announce the collection and implementation mechanism soon.

“An implementation date of April 1, 2018, would be ideal,” he said.

Token sum: Foreigners will soon have to pay a small tourism tax for staying at hotels in Malaysia. — LIM BENG TATT/The Star
Token sum: Foreigners will soon have to pay a small tourism tax for staying at hotels in Malaysia. — LIM BENG TATT/The Star

Malaysian Association of Hotels president Sam Cheah Swee Hee said exempting locals was a good move because they were already paying the Goods and Services Tax (GST).

However, he said the hotel industry was not ready to implement the tax by Aug 1 as systems would need to be re-programmed, adding that it also stood by its earlier call for the levy to be collected at exit points such as airports, ports and border points.

Cheah said currently, there were only 3,126 hotels registered with the ministry and that it would take time for other accommodation providers to follow suit.

“There are more than 8,000 accomodation providers in Malaysia on sites like Agoda alone, and more than 11,000 on Airbnb. This does not include homestays and city stays.

“If it is collected at the hotel based on per room per night stay, it will drive tourists to illegally operated hotels where they need not pay GST and tourism tax.

“If it is a flat rate charged at the exit point, the impact will not be too much,” said Cheah.

Last year, the Statistics Depart­ment said Malaysians made a total of 253.9 million trips to local destinations, spending RM74.8bil.

In comparison, there were 26.8 million foreign tourist arrivals last year, bringing in receipts of RM82.1bil.

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