Hoteliers: Why turn us into tax collectors?

Cheah-Swee-Hee-hotelPUTRAJAYA: Hoteliers have asked the government to cancel its plan to require hotels to collect the new tourism tax. They suggest that the tax be collected from tourists at the country’s exit points.

The suggestion was made at a press conference called by the Malaysian Association of Hotels (MAH), Malaysian Association of Hotel Owners (Maho) and Malaysia Budget Hotel Association (MyBHA). A representative of one of the associations said hotel operators didn’t want to be “collection agents”.

MAH president Cheah Swee Hee said it was unfair to ask hotels to collect the tax as it would require them to upgrade their front office systems.

“We spent millions to upgrade our systems to cope with the goods and services tax (GST) in 2015,” he said, adding that setting up a new system could cost a five-star hotel more than RM1 million.

Citing the Tourism Tax Act recently passed by the Dewan Rakyat, he noted that hotels would have to remit the collection in the same manner they were remitting their GST collection. “So if we pay our GST on a monthly basis, we have to pay the tourism tax on a monthly basis.”

He said this would affect a hotel’s cash flow as its business didn’t revolve only around cash transactions, but also corporate sales and credit payments.

“So we’ll have to fork out first to pay the government, and this is very unfair to us.”

Cheah said collecting the tax at exit points would ensure that it would be imposed only on tourists and not locals staying in hotels for various reasons.

“We have 1.5 million civil servants in the country,” he said. “I’m sure they can help collect it at the exit points.”

He noted that the airport tax was collected at airports before being included in the price of tickets.

Cheah also said the government’s chances of meeting its projected tourism tax collection were slim.

Tourism and Culture Minister Nazri Aziz told the Dewan Rakyat early this month that the yearly revenue from the tourism tax could hit RM872.82 million “with proper promotion and 80% occupancy rate”.

But Cheah said the average occupancy rate of hotels nowadays stood at a mere 35% to 40%.

However, he added, the government could rake in RM600 million if it were to collect the tax from all exit points and if Malaysia reached its target of attracting 31.8 million tourists in 2017.

Maho vice-president Mohamad Halim Merican said many countries had some form of tourism tax and most of them collected it at the point of entry or exit.

He said this ensured that only actual tourists and not locals were taxed. He said if hotels were required to collect the tourism tax, it would see locals being taxed. This would be “very strange”, he added.

Maho executive director Shaharuddin Said said tourists in Japan had to buy a coupon from a machine before departure to pay for the exit tax and show the coupon when leaving the country.

Under the Tourism Tax Act, he noted, hotels were liable for non-payment of the tax if guests didn’t want to pay.

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

Marathon Parliament session ends after almost 20 hours