The tourism tax struggle is real.

According to Borneo Post, 3,000 Chinese tourists have cancelled their trips to Malaysia after it was announced that Malaysia will start imposing its tourism tax from 1st August 2017. The said Chinese tourists, who cancelled their plans because they had to pay tourism tax of about RM100,000, have chosen Thailand as their preferred destination instead.

Source: Shutterstock

Minister of Tourism, Arts, Culture, Youth and Sports Datuk Abdul Karim Rahman Hamzah reacted to the news saying, “This is what Malaysian Association of Hotels has informed me too and the reason why I wanted to have the enforcement date deferred and not to rush through the tourism tax. I will hold on temporarily.”

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Abdul Karim added that he would be going to Sabah next week for finer deliberation on a joint approach with the state on the controversial tax. “It is not to oppose the tax in toto but we want consultation as it affects the state as well as tourism players in the state. We know for sure that the tourism tax is being imposed in many countries in the world but rushing through the tax implementation can have some adverse effects,” he said.

“Many packages were arranged during MATTA Fair in February and March 2017 which are still valid until Dec 31, 2017 but then who is going to bear the ‘extras’ in tourism tax? Apart from that, the methodology of how the tax is collected and disbursed has also not been finalised,” he added.

In February this year, it was reported that Sabah’s tourism industry had its best year ever in 2016, achieving an all-time high of 3.43 million tourist arrivals and RM7.25 billion tourism receipts.

“International visitors alone saw a 15.4 per cent increase and, unsurprisingly, China was the biggest contributor, recording a 51.8 per cent increase from the year before,” State Tourism, Culture and Environment Minister Datuk Seri Masidi Manjun said, adding that Australia was also an emerging market, despite having only one direct flight a week from Perth.

Source: kepkas.sabah.gov.my

Tourism tax is a tax charged at a specific rate on a tourist staying at any accommodation premises provided by an operator of the said accommodation premises. It will be collected from various premises used as accommodation for tourists except homestays and kampung stays, premises that are maintained by religious institutions not for commercial purposes, and accommodation premises with fewer than 10 rooms.

Tax rates start from RM2.50 per room per night at a non-rated accommodation to RM20 per room per night at a 5-star accommodation.

The tourism tax will affect both Malaysians who are travelling within Malaysia as well as foreigners regardless of the purpose of the trip. Keep in mind that this is on top of service charge (10%) and GST (6%).

Sources: Borneo Post, MMO / Featured image: Shutterstock.

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