Nazri: Tourism packages already booked exempted from tax

nazri-tourism1KUALA LUMPUR: The government has decided to relieve individuals who have booked rooms through travel agents until March 2018 from the new tourism tax, Tourism and Culture Minister Nazri Aziz announced today.

He said the ministry was aware that agents in the industry have made commitments with hotels, and that any increase in rates due to the tax would bring inconvenience in dealing with tourists who have already booked packages that include hotel stays.

“So the ministry agrees to exempt those who have made confirmations until March next year. They will be subjected to the tax beginning April 1,” he told a press conference at the ministry’s office here.

He urged the agents to write to the ministry with evidence of contracts and agreements made to be given the exemption.

“We will take into consideration every application,” he said, adding that such an exemption for a specific group is provided for in the Tourism Tax Act 1997 which was passed by Parliament in April.

Nazri also corroborated a statement by the Malaysian Inbound Tourism Association (Mita) that the government had promised an effective “special incentive” for domestic tourism operators with the implementation of the tax.

He confirmed that Malaysians who stay at hotels rated three stars and below are also exempted.

“Those staying at four- and five-star hotels are required to pay for the tax because they can afford it,” he said.

Treasury secretary-general Mohd Irwan Serigar Abdullah had said on June 21 that the government was studying the details of the matter.

The tourism tax comes into force on Aug 1, although the original plan was for it to be implemented this month.

It was reported last month that 3,000 tourists from China had cancelled their bookings to Malaysia because of the new levy.

However, Nazri said the tax was important because the collections that it would make would be used to promote Malaysia and attract more visitors.

He said the ministry did not have enough funds for promotions after its allocation was cut, and following the devaluation of the ringgit.

“So the tourist arrivals have dropped compared to those in our neighbouring countries. The hotel industry should also play a role in promoting the country,” he said.

He said the collections would be based separately on the three regions of Peninsular Malaysia, Sabah and Sarawak.

Nazri said house owners who offered stays through Airbnb would also be subject to the tax, but added that it would only affect those with six rooms or more.

“We will rate them according to a star-rating system. For example, those with a four-star rating will have to pay tax just like four-star hotels.

“We will not wait for them to come to us but instead we will go and register them,” he said, adding that the process had already begun.

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Tourism tax: 3-star hotels and below may be exempted