Wednesday, April 12, 2017

SHA against implementation of tourism tax

A GRAVE CONCERN...Chan (right) and Narendra warned
the tourism tax will drive tourists away.
KOTA KINABALU: The Sabah Hotel Association (SHA) is against the implementation of the proposed tourism tax tabled at the current Parliament sitting in Kuala Lumpur.

Its president, Christopher Chan warned the tourism tax renamed from the earlier proposed tourism levy will have a profound impact on the hotel industry and the overall tourism industry of Malaysia.

“The hotels have been tasked to demand from our hotel guests to pay this tax which is normally out of our trade jurisdiction.

“We will have to set up another collection point which is not to be included in our accounting system and it will be separated,” said Chan during a press conference at a hotel here, yesterday. Also present was its committee member Narendra Sinniah.

Under the circumstances, he said a different set of staff will have to be employed to do this work with new accounting software, printers and stationery which have nothing to do with the hotel.

“The cost of setting up this function will cost each hotel expenses in excess of RM68,000 annually.

“For example, as four staff are needed to do the task with a minimum salary of RM1,200 per person each month, in one year we need to pay RM57,600 for their salaries including RM8,640 for EPF and RM2,306 for Socso. The total sum is RM68,546 annually,” reckoned Chan.

“Imagine the impact that will burden the whole hotel industry in Malaysia. The other issue will be..are they going to be charged once or for the whole duration of their stay?” he asked.

“I met two ladies who were on a four-week holiday to Malaysia starting in Sabah before going to Kuala Lumpur and proceeding to Langkawi and Penang. Do you think they are going to be charged on each hotel check-in?” asked Chan.

With so many centres created for the purpose, he said it is definitely not the most effective and cost efficient way to fulfil the purpose. The hotels will be strapped with a long term running cost which does not contribute any income or benefit to the organisation.

Furthermore, he said there are foreigners working here on work pass and those on diplomatic status. “What authority does the hotel have to ask for documents for exemption?”

“There are those foreigners with permanent residence status. What about those tourists who put up with relatives or friend’s houses? Are the hotels given immunity from any legal actions by third parties? And will such cases be undertaken by the government?” asked Chan.

Tourism Malaysia reports the total tourist arrivals to Malaysia in 2016 were 26.8 million contributing RM82.1 billion to the country’s revenue.

“This translated into RM3,068 per capita and are they going to be happy to be charged a tax for going on holiday in Malaysia?

“If they come in we can make more business, if not, every lost customer is zero opportunity,” he stressed. In the case of Sabah which raked in RM7.25 billion in tourism receipts from the arrivals of 3.4 million tourists that translated into RM2,132 per capita income, he pointed out.

“I don’t believe that we can afford to see any drop in tourist arrivals due to the imposition of tourism tax as the tour operators might lose out to other tourist destinations in Asean as a result of higher cost in our tour packages. “A drop in 1 per cent alone in tourist arrival will see a loss of RM7.25 million that goes with the RM435,000 GST,” warned Chan.

This move will also affect the backpackers and homestay operators who will also have to top-up with additional expenses and the sitting up of bank accounts to deposit the tax and make payments, he said.

“How does the government intend to deal with Airbnb operators who are not licenses and have no registered address?” asked Chan.

He anticipated the imposition of the tourism tax is bound to affect some 550 hotels operators ranging from budget to resort status throughout Sabah including 70 members of SHA.

-new sabah times.

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