PETALING JAYA: The Malaysian Tourism Federation (MTF) has backed calls to abolish the decades-old entertainment tax, saying the levy has outlived its purpose and is making tourism and recreational activities less affordable for both Malaysians and foreign visitors.
Its president Dr Sri Ganesh Michiel said the federation supports the Malaysian Association of Theme Parks and Family Attractions' (Matfa) proposal to abolish the Entertainment Duty, arguing that the tax, introduced in 1953, no longer reflects the realities of today's tourism and entertainment industries.
“Entertainment, theme parks, cultural attractions and recreational activities are no longer considered luxuries but play an important role in domestic tourism, family well-being and economic growth.
“In some states, entertainment tax can be as high as 25% of ticket prices, directly increasing costs for consumers and discouraging participation in family-friendly and cultural activities,” he said in a statement on Wednesday (July 8).
Ganesh said lower ticket prices would encourage more visitors, stimulate domestic spending and generate wider economic benefits for hotels, restaurants, transport operators, retailers and small businesses that depend on tourism.
He also called for a comprehensive review of tourism-related taxes, noting that the industry is already subject to multiple levies, including tourism tax, sustainability fee in Selangor and Pahang, hotel fee in Perak and the proposed travel charge in Johor, on top of licensing fees and other compliance costs.
"The industry cannot continue to be viewed as a convenient source of revenue whenever fiscal gaps arise.
"There must be a limit to how many taxes and charges can be imposed before affordability, competitiveness and demand are adversely affected," he said.
Ganesh also said governments should prioritise addressing revenue leakages from illegal and unregulated operators, particularly in the short-term rental accommodation sector, instead of introducing new taxes on businesses that already comply with regulations.
He added that MTF had previously proposed that tourism tax and other visitor-related levies be rationalised and collected through a centralised mechanism at the country's entry and exit points to reduce administrative burdens and improve tax collection.
