Penang refutes Nazri, will not stop collecting room tax

Penang has decided not to heed the instruction from Tourism and Culture Minister Nazri Abdul Aziz, who told states to stop collecting hotel room-based local government fees when the tourist tax is enforced on July 1.

Chief Minister Lim Guan Eng said this was "something new" and was never raised when the tourist tax bill was debated in the last sitting of Parliament.

Saying he was surprised by Nazri's statement, Lim added that the Tourism and Culture Ministry has also failed to inform and consult states on this matter.

"We beg to differ from the minister.

"Can we get an assurance that the money collected will be channelled back to the states to improve the local tourism industry?" Lim asked at a press conference today.

Newspaper theSun quoted Nazri as saying the room-based tax collected by the states would be a duplicate charge on tourists and would be counter-productive when the country implements a single tax system, the tourism tax.

The rates under the new tourism tax start at RM2.50 per room per night for non-rated accommodation and up to RM20 per room per night for five-star hotels.

The tax has resulted in verbal wars between Nazri and state leaders in Sabah and Sarawak, who plan to defy the law, arguing that it would be a burden for the tourism industry.

Questions yet to be ironed out

Lim said there were questions that were yet to be ironed out, including whether the tax should be collected from Malaysians or foreigners, and related issues.

He lamented that the amount of RM20 a night to be collected was too large, compared to the state's room-based tax of between RM2 (for hotels below three stars) to RM3 (hotels above three stars), and that it was hardly felt by users.

He noted that Langkawi and Malacca have similar fee structures in place as the fund is useful for the states to manage their local tourism sectors.

"The local government room-based tax is very useful, it helps organise programmes to promote the local tourism industry," Lim said at a press conference today.

"The local hotel associations and tourism players are also consulted in the Penang Tourism Council on ways to improve the tourism industry."

Lim said Penang would await an official announcement from the federal government before proceeding further on the matter.

As such, the state will continue to collect the room-based tax, which was implemented in 2014, he added.- Mkini