Tourism tax: Hoteliers seek talks with Putrajaya

Cheah-Swee-Hee-putrajayaPUTRAJAYA: Hoteliers have urged the government to address their concerns over the new tourism tax, including the question of how it will be collected.

Representatives of the Malaysian Association of Hotels (MAH), Malaysian Association of Hotel Owners (Maho) and Malaysia Budget Hotel Association (MyBHA) said at a press conference yesterday that they had many questions to raise and the government should engage with them directly.

“The tax was pushed through without appropriate consultation,” said MAH president Cheah Swee Hee.

He said hotel operators were also concerned about the timing of the tax. He disclosed that hotels were currently not doing good business, with occupancy rates hovering between 35% and 40%.

He said hotels already had to cope with the rising prices of goods, the goods and services tax and the imposition of the minimum wage regulation.

“This tax is also not in line with the government’s goal of getting people to stay longer in the country,” he said. “The longer they stay, the more expensive it will be for them.”

Cheah also said the imposition of the tax on locals would affect domestic tourism and cause hardship on those travelling for purposes other than pleasure.

“There are many Malaysian parents who might stay in a hotel when they visit their children in college. There are also those who visit their loved ones in hospitals outside the state they live in. They aren’t tourists. So imposing a tax on locals is a bit much.”

He also noted that some local authorities, such as those in Penang, Malacca and Langkawi, were already imposing their own taxes on tourists.

Maho vice-president Mohamad Halim Merican said he would like to know how the government would collect the tax from nearly 10,000 unlicensed accommodation providers.

According to Tourism Malaysia’s MyTourismData portal, Malaysia had 4,799 hotels and 304,721 hotel rooms in 2015.

But Halim noted that according to travel metasearch engine, there were more than 8,000 vacation rentals – such as apartments and homestays – and hotels in Malaysia, and more than 5,000 listings on AirBnB.

“There are still many questions unanswered,” he said. “For example, we also want to know if the tourism tax is before GST or after GST. Can the tourism tax be zero rated?”

MyBHA president PK Leong asked how the revenue from the tax would be used.

He said accommodation only accounted for 25% of a tourist’s expenses and it would therefore be unfair to make hotels solely responsible for collecting it.

“It should be called a hotel tax, not tourism tax,” he said. “It should be put in a special fund and controlled by hotel operators to promote hotels.

“Once the money is out of our hands, we can’t control how the government spends it. If we have to collect it, we must benefit from it.”

Leong noted that the amount to be collected would differ according to a hotel’s star rating. This would discourage hotel owners from upgrading their ratings, he said.

According to the Tourism Tax Act, revenue from the tax will be channelled to the Finance Ministry. 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.