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Nazri: Tourism tax to plug advertising budget deficit

 | July 17, 2017

Minister says tourism promotion efforts overseas hit by sharp reduction in budget and depreciation in ringgit.

nazri-tax-hotelKUALA LUMPUR: The much-criticised tourism tax is meant to plug the deficit in the tourism and culture ministry’s advertising spending budget, its minister Nazri Aziz said today.

He blamed the deficit on a sharp reduction in the tourism promotion budget to RM110 million this year from the previous allocation of RM200 million.

The depreciation of the ringgit also made promoting Malaysia overseas more expensive, he said.

“What’s worth RM110 million in 2011 is worth less now, maybe by half.

“We can’t stop. Regardless if we have the money or not, it has to continue. And in some cases, like if we want to put up a billboard in China, we have to make a booking.

“We can’t say ‘Wait until I have the money’. We have to be confident when we make a booking,” he told reporters here today.

Nazri hoped the tourism tax would be implemented soon to solve the ministry’s problem.

“With this tax, we can collect more than enough, God willing,” he said.

The tourism tax was originally planned to come into effect on July 1 but has been postponed due to opposition by tourism industry players as well as the state governments of Sarawak and Sabah.

Last month, China Press reported that the ministry allegedly expedited the implementation of the tourism tax in a bid to overcome a RM250 million deficit incurred by the Tourism Board.

Quoting sources, the Chinese daily reported that the Tourism Board had failed to properly plan its expenditures, especially when it came to promoting tourism in countries like China and Japan.

The shortfall in the board’s finances had continued for the past two years, it said.

Describing the board’s spending as “like a running tap”, the newspaper reported the federal government was unwilling to cover the RM250 million bill.

The tourism tax will see local and international tourists paying a levy to operators of registered accommodation premises.

The tax per room-night for non-rated hotels will be RM2.50, while the tax for two-star hotels will be RM5; three-star, RM10; four-star, RM15; and five-star, RM20.

Treasury secretary-general Mohd Irwan Serigar Abdullah was reported last month as saying there were plans to exempt locals staying at three-star hotels and lower-rated accommodation from the tourism tax.

Nazri said Malaysia needed to step up its tourism promotion efforts because neighbouring countries were also attracting a lot of tourists.

“If we don’t promote we will be in trouble because people will go to Thailand, Indonesia and even Myanmar.”


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