Hotels with contracts to get tourism tax exemption

KUALA LUMPUR, July 7 — Hotels bound by contract to foreign tour operators until March 31 next year will be exempted from the tourism tax, the Tourism and Culture Ministry said. 

This follows a meeting between the ministry and industry players on Tuesday to cushion the impact of the tax on stakeholders when it comes into effect on Aug 1. 

The minister, Datuk Seri Mohamed Nazri Abdul Aziz, said: “The contracted rates would be considered up to March 31, and by April 1, next year, all contract rates should include the tourism tax.”

He also said in a statement that AirBnB properties would be rated and taxed, but would only include those with more than five rooms under the same owner.

Nazri said although the implementation of the tax was tentatively planned for Aug 1, it was still dependant on the readiness of the Customs Department. “The real date will be announced later,” he said. 

Contracts between local and foreign tour agencies on room rates and other special arrangements are renewed every April 1. 

Malaysian Inbound Tourism Association (Mita) president Uzaidi Udanis said the incentive would be provided to tour operators under Mita, Malaysian Tourism Council (MTC) and Malaysia Chinese Tourism Association (MCTA).

“The minister has also guaranteed there will be incentives to offset cancellations of inbound group bookings and to avoid tour operators from forking out their own money,” he told a press conference at the Malaysia Tourism Centre.

He, however, said the form of incentives had not been finalised. 

Uzaidi said the meeting was useful as the minister was able to clarify how the collected tax would be utilised and the importance of having a sustainable fund for promotional purposes.

“Nazri has made it clear the collection would be channelled to promotional activities and improvements of tourism infrastructures,” he said. 

“We can understand this because it is important to persuade foreign tourists to come to our country and promoting Malaysia overseas is not cheap.” 

Uzaidi said the government was expected to collect about RM2.7 million in tax from Chinese tourists alone from August to December this year.

The tourism tax is levied on hotel rooms. It varies according to the types of accommodation and is charged on a per-room, per-night basis. 

The chargeable rate is RM2.50 for non-rated hotels, RM5 for two-star hotels, RM10 for three-star hotels, RM15 for four-star hotels and RM20 for five-star hotels.

-malaymail online.