Sarawak accepts new controversial tourism tax after delay

Published on : Tuesday, June 27, 2017

Sarawak new controversial tourism taxAfter accepting a controversial tourism tax, Sarawak said that it will not levy the tax next month because the implementation methodology has yet to be finalized.

To quote Chief Minister Abang Johari Openg, “Negotiations between the state and federal governments on the methodology (for the tax) are ongoing.” He said if the state goes ahead to impose the tax as scheduled on July 1, it will breach the forward-booking contracts between the hoteliers and foreign tourists, which previously did not include the tax.

In April, Malaysia announced that it would impose a tourism tax of between RM2.50 (S$0.80) and RM20 per room, per day for hotel stays. This invited a criticism from the East Malaysian states of Sabah and Sarawak, as well as the tourism industry. Sarawak withdrew its representative from the Malaysian Tourism Board with immediate effect earlier this month, as the tiff between the Borneo state and Putrajaya over the new tax escalated.

The tourism tax row followed a sharp exchange of words between Sarawak’s Tourism Minister Abdul Karim Rahman Hamzah, and his federal counterpart Nazri Abdul Aziz. Sarawak finally accepted the new tourism tax on Thursday, but Mr Abdul Karim said the tax collection from the hotels in the state should be distributed directly to the state government.

After his discussions with Mr. Najib, Mr. Abang Johari said it was agreed that hotels rated three-stars and below will not be subject to the tax.

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