Can tourism tax be implemented by Aug 1?

Hotel associations question logic in postponing July 1 target date by just one month, saying much remains to be done to implement tourism tax.

PETALING JAYA: The recent deferral of the tourism tax has left hotel associations questioning if the mechanisms required for the tax’s collection will be in place even by the new deadline of August 1.

“Now suddenly from July 1, it has been postponed to August. Another target has been set,” Malaysia Budget Hotel Association (MyBHA) president PK Leong told FMT.

Leong asked if implementing the tourism tax was possible by August considering there were between 10,000 and 12,000 hotels and other types of accommodation that were required to collect the tax.

“How are all these things going to be resolved?”

Now that locals no longer have to pay tourism tax at hotels rated three stars and below, he added, many four-star hotels might drop their ratings in an attempt to avoid the tax, which would inevitably create a “disturbance in the market”.

Leong said it was unfair that Airbnb was not subject to the tax while hotels that paid the GST, corporate tax, personal tax and licence fees were being made to pay by the government.

“Why is the government penalising good corporate citizens who already pay various taxes to them?” he said.

He told FMT that the association was still looking forward to an active discussion with the finance ministry and other relevant authorities to convey its point of view.

Meanwhile, Malaysian Association of Hotels (MAH) president Sam Cheah Swee Hee said the customs department had not given any indication on the implementation of the Tourism Tax Bill which was passed in the Dewan Rakyat on April 6.

“Nothing was given on the implementation. All the information that we get is from the media,” he told FMT.

Cheah added that the association’s stand remained the same: that the tax should not be collected by hotels.

In a report by Sin Chew Daily, Tourism and Culture Minister Nazri Aziz said the implementation of the tourism tax had been postponed to August 1 as some systems were not yet in place.

Nazri added that foreigners would be subjected to the tourism tax, while locals staying at hotels rated three stars and below would be exempted.

According to him, the customs department will be in charge of collecting the tourism tax.

Nazri, who is also Padang Rengas MP, said the date had been targeted, but that it was up to the customs department to ensure that the tax was implemented smoothly.

The tourism tax was originally divided into four categories – RM20 charged per night for five-star hotels and RM10 for four-star, RM5 for three-star and RM2.50 for two-star establishments and below. -FMT