After reviewing the tourism tax, Malaysia’s Tourism, Arts and Culture Minister Mohamaddin Ketapi has decided the flat rate of RM10 (US$2.47) per room per night on foreign tourists will be maintained.
In response, Malaysia Budget Hotel Association president, PK Leong, told TTG Asia that the three hotel associations, Malaysian Association of Hotels (MAH), Malaysian Association of Hotel Owners (MAHO) and Malaysia Budget Hotel Association (MyBHA), were not consulted before the ministry made its decision, and that the three hotel associations would jointly make an appeal.
Mohamaddin said in Parliament that the implementation of such a tax by countries such as the US, the Netherlands, Italy, Singapore and Thailand had brought positive growth to their tourism sector in the longterm, adding Japan and Saudi Arabia had also recently implemented the tourism tax.
This was Mohamaddin’s first major announcement after his appointment in early July.
MAHO executive director, Shaharuddin M Saaid, added that the three hotel associations would also raise the issue with the ministry about establishing a new mechanism so that hotels do not end up as collecting agents for the tax.
Leong said budget hotels stood to lose the most as these hotels charged an average of RM50 (US$12.33) per room per night, thus the tourism tax was equivalent to 20 per cent of the room rate.
He said: “Foreigners stay in budget hotels because they wish to save money. They have two choices if they decide not to pay the tourism tax. They could opt to stay in an Airbnb, which is unlicensed, or choose a different destination, instead of visiting Malaysia.”
Asutra Convex managing director, Azizi Borhan, suggested that local travel agencies include the tax in tour packages and the tour leader could then pay the hotel based on a pre-arrangement between the hotel and the tour operator.
He said: “Hoteliers should open their minds and find a creative solution to the tourism tax issue.”
He believed that four- and five-star hotels could also absorb the tourism tax as the amount was negligible compared with the room rate.