Abolish tourism tax, budget hotels say it again

Budget hotel associations say the government has not approached them for discussions on the tax, and that foreign tourist arrivals have taken a hit from the RM10 fee.

Budget hotel operators say the tourism tax comes up to 14%-20% of their room rates. (File pic)

PETALING JAYA: Budget hotel associations have voiced disappointment over the government’s announcement that the tourism tax introduced last year will be maintained.

Malaysia Budget Hotel Association (MyBHA) president PK Leong said the government should keep its promise to abolish the tax.

“We have written to the minister, but the latest we heard was media reports that the new government will continue with the tourism tax,” he told FMT.

Adding that he was still awaiting a discussion on the matter between the government and industry players, he said they had asked the minister to review the tourism tax implemented by the previous government.

“The government’s argument is that the tax will be paid by foreigners, not locals, and so far no foreigners have complained.”

However, he pointed out that foreign tourists had the choice of coming to Malaysia or going to other Asean countries like Thailand, Vietnam and Indonesia.

He said such countries had recorded double-digit growth in tourist arrivals while Malaysia showed negative tourist arrivals.

“It is clear that the tourism tax is causing foreign tourists to avoid Malaysia.”

On Monday, Tourism, Arts and Culture Minister Mohamaddin Ketapi said the flat rate of RM10 per room per night would be maintained following a review of the tax.

In a written reply in the Dewan Rakyat, he said the tax was expected to have a positive impact on the tourism industry and would not burden Malaysians as it was only imposed on foreign tourists.

However, Leong said tourists who were on a tight budget would prefer to stay at Airbnb accommodations to avoid paying the tax.

This would cause budget hotels to lose out, he added.

“This tax is unfair to budget hotels as our room rates are only RM50 to RM70.

“The tourism tax comes up to 14%-20% of the room rate, which is much higher than the previous goods and services tax with the new 6% service tax.”

Malaysian Association of Hotels (MAH) president Cheah Swee Hee meanwhile said no discussions had been held with industry players on the matter.

“Our stance is clear that it would be best to have the tourism tax abolished as it is counterproductive for business,” he said. - FMT