Malaysian trade suffers teething pains from tourism tax rollout

Barely a week into the implementation of the unpopular tourism tax in Malaysia, travel agents and hoteliers in the country say they are now burdened with the hassle of tax collection and additional costs incurred in the teething stages.

Diethelm Travel Malaysia’s managing director, Manfred Kurz, said the company has had clients from Europe and the US complain when asked to pay the tax at hotels as they thought this was already included in the package price.

And while Diethelm’s overseas agency partners had attempted to pay the tax on behalf of clients, hotels insisted that the tax be paid by guests at the point of check-out, according to Kurz.

“Now clients pay the hotels and then get reimbursed by their travel agents back home, but this form of transaction is a hassle. Our fear is that our tour operator partners will be reluctant to promote Malaysia in future if this hassle continues and nothing is done to improve the current system.”

Ally Bhoonee, executive director, World Avenues, added: “We’ve had to pay a staff double to be on standby at the office and handle complaints from clients who refused to pay the tax during the recent long weekend and public holidays from September 1 to 4.”

Bhoonee explained that the company sees the additional service necessary in order to retain regular agency clients.

There is also the problem of costs incurred by tour operators who had committed to contractual hotel rates before the tax was announced.

Although the Malaysian Association of Tour and Travel Agents said those affected may apply for an exemption with the government, the association is still concerned about members who have to pay large sums while awaiting exemption or refunds.

“We are of the view that the intention of the tax is meant to benefit all stakeholders eventually, and those initially affected by its introduction should be given speedy assistance by the government”, concluded Tan.

Applications for exemption are to be submitted to the Ministry of Tourism and Culture, before being forwarded to the Ministry of Finance for evaluation and approval on a case-by-case basis.

-TTG Asia.