Malaysia exempts own people from tourism tax

This came after the government decided to only impose the tax on foreign tourists at a flat rate of 10 ringgit (Bt78).
Malaysia’s tourism and culture minister, Datuk Seri Mohamed Nazri Abdul Aziz, told Parliament Wednesday 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.
The minister 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 2.50 ringgit and 20 ringgit 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 20 ringgit for four- and five-star hotels to 10 ringgit 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 five percent and 30 percent 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.