New Bill will hurt tourism, say hoteliers

Published on: Wednesday, April 12, 2017

Kota Kinabalu: Sabah Hotel Association (SHA) feels the new tourism tax bill which was passed in parliament last week would hurt hotel owners in the State.

Its President Christopher Chan on Tuesday said the association is extremely concerned over the new tax regime, the proposed implementation of which remains unclear to date, and that they risk to lose business from it.

The bill tabled by Tourism and Culture Minister Mohamed Nazri Abdul Aziz last week will allow the Federal Government to impose the tax levied on a tourist staying at any accommodation provided by an operator at a rate fixed by the minister, in accordance with the law.

“We believe the new tax will have a profound impact on the hotel industry and the overall tourism industry in Malaysia.

“How will we know that our guests would not be charged twice or thrice if they stayed in multiple hotels during their visit here,” said Chan, adding that a new levy would mean tourists would have to pay more for their stay in Sabah.

According to Chan, the collection of such tax was outside their trade jurisdiction as he was made to understand that hotels are tasked to charge guests with the new tourism tax and that this was to be charged separately from the Goods and Services Tax (GST).

He believed an additional cost of around RM68,000 annually would have to be footed by hotel owners to buy a separate accounting software, collection booth and hire staff to work in shift to ensure the collection.

However, Chan said hotels may also violate the Personal Data Act as the personal data of their guests is collected when hotels are not supposed to reveal the identity of their guests and respect their privacy at all times.

The higher cost of accommodation would also mean tourists would decide to check-in to the so-called illegal hotel or homestay operators which are normally set up in residential areas, he said.

“Tour operators also risk losing business as their clients are likely to decide to take their money elsewhere for the holidays, following the implementation of the new tax,” he said.

Tourists spent on average RM2,132 in Sabah based on the RM7.25 billion collection from 3.4 million tourists who visited Sabah last year and Chan believed a slight drop due to the new tax, even at one per cent, would see the Federal Government lose RM435,000 in GST collection.

On April 6, Parliament passed the Tourism Tax Bill in a record session that lasted for almost 20 hours.

When winding up the debate for the Bill, Nazri said revenue from Tourism Tax would be in the region of RM654.62 million if the overall occupancy rate for the 11 million “room night” in the country can achieve 60 per cent.

But on Sept 9 last year Sabah had rejected plans by Nazri to impose a hospitality levy following a cabinet discussion.

Tourism, Culture and Environment Minister Datuk Seri Masidi Manjun in deliberating the discussion said that should any new form of levy be introduced, the collection should go to the State and not Federal.

He noted such plans by the the Minister was worth considering but not at present times when the economy is still volatile.

“The tourism is viewed as the saviour of the country’s economy when times are tough.

“The revenue is huge at present … but many players are not making a big profit,” said Masidi.

But Nazri insisted that if a decision to impose the tax is made, it is well within the Putrajaya’s right to do so and could renamed the ‘Hospitality Levy’ as ‘Tourism Tax.’ – Jason Santos

New Bill will hurt tourism, say hoteliers by: Farah Grimm published:


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