Reinstate tax exemptions for tour operators in Budget 2025, govt told

 

Malaysian Tourism Federation president Tan Kok Liang said its members want the tax exemptions that were withdrawn in 2023 to be reintroduced. (Bernama pic)

PETALING JAYA: 

The Malaysian Tourism Federation (MTF) has urged the finance ministry to reintroduce tax exemption incentives to support domestic travel, saying the tourism industry can use the taxes saved for marketing activities.

In a statement, MTF said broader and more inclusive tax incentives should be offered in Budget 2025 to accelerate tourism development for significant sub-sectors of the tourism industry.

A glaring exclusion is tax incentives for tour operators organising domestic or international travel groups in Malaysia, since it was withdrawn in the year of assessment 2023,

 it said.

MTF president Tan Kok Liang said the tax incentives, which first started in 2013, provided licensed tour operators tax exemptions on 100% of their statutory income.

The incentive required that operators organising international tour packages to Malaysia see participation of not less than 750 inbound tourists per year, while operators organising domestic tour packages see participation of not less than 1,500 local tourists per year.

Disappointingly, it was withdrawn in the tax assessment years 2023 and 2024,

 Tan told FMT.

MTF also called for a revisit of the currently available tax incentives, including pioneer status eligibility for hotels that have up to three stars and convention centres, and income tax exemption for organising specific conferences and sports events.

“These incentives should be reviewed to ensure they remain relevant and practical to reflect the current business environment, failing which they need to be updated or repealed in Budget 2025.

To position Malaysia as a premiere destination and increase international arrivals, there must be support and understanding from interlocking government agencies, more conducive policies and also aggressive private sector-driven initiatives backed by the government,

 it said. - FMT