Malaysian tour operators with contracts to get tourism tax exemption

Clients of local inbound agents who have already signed contracts with overseas partners will be exempted from paying the tourism tax for the contracting period until March 31, 2018, announced Malaysia’s Ministry of Tourism and Culture (MOTAC).

This is a concession provided by the ministry to cushion the impact of the impending tourism tax, which will come into force on August 1, and reduce the chances of tour cancellations or reduction in group sizes.

To be eligible for the exemption, inbound agents are required to write to MOTAC with evidence of contracts and agreements.

Tourism and culture minister Mohamed Nazri Abdul Aziz also said that Malaysians staying at three-star and below properties will be exempted from paying the tourism tax.

The announcement comes in the wake of a meeting held earlier this week between Malaysian Inbound Tourism Association, Malaysia Tourism Council and Malaysia Chinese Tourism Association representatives with the minister as well as MOTAC officials to discuss concerns and issues raised by industry players related to the tourism tax.

Meanwhile, representatives from the state tourism ministries of Sabah and Sarawak agreed to defer the tax in their states until an implementation mechanism has been worked out, The Star reported.

Officials from both states agreed at the meeting that revenue from the tourism tax should be shared equally between Sabah, Sarawak and Peninsular Malaysia.

Sarawak’s tourism, culture, youth and sports minister, Abdul Karim Rahman Hamzah, said the best time to implement the tourism tax would be next year.

The tax rate is fixed at RM20 (US$4.70) per room per night for five-star accommodation; RM10 per room per night on four-star accommodation; RM5 per room per night on one-, two- and three-star accommodation; RM2.50 per room per night on one-, two- and three-Orchid as well as non-rated accommodation premises.

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