Malaysia New Tourism Tax to Serve Overseas Promotion

“They are not present this year? ” The question circulated among professionals last March at Paris Salon Mondial du Tourisme, B2C event. The regretted absent was in fact the French office of the Malaysian Tourism Board, which had until now always been present at the show. Same low profile of Malaysia Tourism Board in Bangkok. The office, present for many decades in the Thai capital has been recently very silent. “We had to cut on our overseas activities as less money has been made available for our agency”, indicated in a private conversation Mirza Mohammad Taiyab, Director General Tourism Malaysia.

The most spectacular action to save money at the agency was the closure of most domestic offices except the ones located in Sarawak, Sabah, Penang, Terengganu, Kuala Lumpur International Airport and Johor Bahru. In 2015, Malaysia federal government cut tourism budget by 25% for 2016, the equivalent of 12 million US dollars from a total of US$48 million. For many years, the budget for Tourism Malaysia stood at RM200 million but the decline in the value of the Ringgit affected international promotion as the local currency lost 25% to 30% of its value over the last four years.

The new Tourism Tax is likely to help balancing the loss from both budget cut and money devaluation. According to Tourism and Culture Minister Datuk Seri Nazri Aziz, the new tax could provide up to RM600 million (US$144 million) in additional revenues.

Money collected from the Tourism Tax, which comes into force on July 1, will be used to promote Malaysia overseas and refurbish tourism facilities, says

Nazri said the ministry needed to find new sources of income to finance its activities after the government reduced its allocation following the decline of world oil prices.”The provision for tourism has been reduced, however, this does not mean tourism is not a priority of the government, but there are more important priorities such as rural development, education, health and defence,” he told reporters here.

He stressed that the tax was not something new as it had already been introduced in Indonesia, Thailand and Singapore.

The Tourism Tax Bill 2017 which was passed in the last Parliament sitting with a majority vote, among others, allows imposing tax rates of between RM2.50 and RM20 for overnight stays at registered hotels and inns.
(Partial source: Bernama)