Opposition to tourism tax not letting up in Malaysia

Shaharuddin expects there will initially be some guests who will refuse to pay the tax

In Malaysia, the unpopular tourism tax will be enforced nationwide on September 1 but grievances continue to pour in from local hoteliers and agents.

Among them, any tourist who checks in early or checks out late at hotels from September 1 will be made to pay a tourism tax of RM10 (US$2.34) for the extension, on top of the RM10 tax per room, per night.

Shaharuddin expects there will initially be some guests who will refuse to pay the tax

“It is unfair but hotels have no choice but to charge because we have no letter in black and white from the government telling the hotels otherwise. If we don’t charge the guest, the hotel will have to pay the tax for the guest,” revealed Shaharuddin Saaid, Malaysian Association of Hotel Owners (MAHO) executive director.

Guests who receive complimentary rooms from hotels will also have to pay the tourism tax.

Other issues brought up at the meeting last week with Royal Malaysian Customs Department, the Ministry of Finance and the Ministry of Tourism and Culture include whether budget accommodation operators with dormitories of four to six beds are going to charge guests.

Shaharuddin challenged: “Do you charge only one person, or every guest in the room? Also with such budget accommodation where the room rates are as low as RM100, the tourism tax of RM10 per room per night is more than the Goods and Services Tax (GST) of six per cent. This is unfair!”

He had also expected a certain amount of confusion in the early days of implementation. He said: “Tourists may argue with hotels and refuse to pay. We will then be made responsible and pay on their behalf. The government had also not given enough time for hotels to upgrade their accounting systems to facilitate the collection of the tourism tax. The GST should not be charged on the tourism tax but if the systems have not been upgraded properly, this may show.”

He opined that the tax will also have an impact on long stay guests such as corporate clients. The association had proposed a cap on the number of days the tax can be applied to, regardless of the number of days the guest is staying.

“We have also stressed to the authorities in our last meeting that starting the tourism tax on September 1 gives unlicensed accommodation operators in the country an unfair advantage as they have not been registered with the Ministry of Tourism and Culture to collect the taxes. There are more than 8,000 of them listed on accommodation portals like Booking.com and Airbnb website.”

Moreover, the exemption for clients of agencies that have signed contracts with overseas partners for the current contracting period until March 31, 2018 will not be implemented without an official letter from the Ministry of Tourism and Culture.

Nanda Kumar, managing director of Hidden Asia Travel & Tours, said the agency still has to pay over RM120,000 in tourism tax to hotels for advance bookings made before the tax was introduced.

The Royal Malaysian Customs Department issued a circular on August 29 stating:

– no tourism tax will be levied on early check-in and late check-out so long as no room charges are imposed. However, complimentary stays offered by an operator to a tourist will still be subject to the tax;

– in cases where more than one tourist is staying in the same accommodation at the same time, e.g. dormitory arrangement, and the tourism tax for that accommodation has been paid by any one of the tourists, the other tourists are not liable to pay tourism tax for that accommodation.

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