Friday, 7 July 2017

(The Edge Financial Daily) New tourism tax unlikely to impact inbound tour business


KUALA LUMPUR: Malaysia’s inbound tour operators are not expecting the controversial new tax on tourism-related services to affect their business as the government has pledged to provide them with incentives.

On Tuesday, the Malaysia Inbound Tourism Association (Mita), the Malaysia Tourism Council and the Malaysia Chinese Tourism Association met with Tourism and Culture Minister Datuk Seri Mohamed Nazri Abdul Aziz over the tourism tax issue and they were told that incentives will be given to inbound tour operators for their support.

Mita president Uzaidi Udanis said the government has agreed to provide incentives to local travel agencies to prevent contract cancellation arising from the introduction of the tourism tax on Aug 1.

He said details of the incentives will be announced soon after the government has determined a suitable mechanism in granting the incentives.

“Most travel contracts between local and foreign travel agencies were agreed upon and signed prior to the tourism tax implementation.

As such, the agreed prices were not inclusive of the tax,” he told a press conference yesterday.

The new tourism tax will see rates of between RM2.50 and RM20 charged on both Malaysians and foreigners for a night’s stay at certain types of accommodation except homestays. Mohamed Nazri was previously reported as saying that the tax would be able to bring in an income of about RM654.62 million if there is a 60% occupancy rate for over 11 million hotel rooms in the country.

Uzaidi said Mita members are aware that the new tax collected will enable the government to assist tourism players in their efforts to attract more tourists to Malaysia.

“The tax returns will be used to develop the tourism industry, such as the enhancement of tourism infrastructure and facilities and tourism promotional activities,” he added.