Tourism tax causes Malaysian hotel operators much resentment

Published on : Friday, April 7, 2017

Malaysian hotelMalaysian hotel operators are enraged over a government plan to impose tourism taxes on room charges. They are of the opinion that such policy would drive tourists away.

The Malaysian Association of Hotel Owners (MAHO), a group of hotel owners, said that the newly passed Tourism Tax Bill 2017 will add to the woes of operators, struggling to cope with the Goods and Services Tax (GST) introduced two years ago.

To quote Shaharuddin M Saaid, the association’s executive director, “On top of the extra cost, there will be more (administrative) work for the employees. It (the hotel industry) will be affected.” He said that such taxes will affect domestic tourism as it applies to local and foreign tourists in the country. Mr Cheah Swee Hee, president of the Malaysian Association of Hotels (MAH), also said that the tax could create an uneven playing field between the licensed and unlicensed hotel operators. To quote him, “The new tax may drive local and foreign tourists into seeking accommodation at places such as Airbnb and unlicensed hotels.” He added, “We are seeking to engage the government on our concerns related to this tax and have sent a letter to the relevant authorities.”

The tourism tax Bill was passed with a stirring majority in Parliament yesterday morning in a record breaking session that lasted for almost 20 hours. However, Dr. Ramon Navaratnam, chairman of the Centre of Public Policy Studies, said that it is too early to forecast the impact of the tax. He said that if the facilities provided by the hotels are good, the additional charges would not make much difference in terms of room occupancy.

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