No tourism tax for Malaysians, foreigners pay RM10 flat rate

nazrii-tourismKUALA LUMPUR: The government has decided not to impose the tourism tax on Malaysians, the Dewan Rakyat was told today.

Tourism and Culture Minister Mohamed Nazri Aziz said although the tax will not be applicable to Malaysians, foreigners will still have to pay a flat fee of RM10 per room per night, regardless of the star rating of a hotel.

“With the flat rate, no complex mechanism is needed to collect the taxes.

“The flat rate will make it easier for customs to collect taxes based on the number of rooms booked at a hotel,” he said during a question-and-answer session.

He said the flat fee also makes it easier for tourists to know how much they have to pay, based on the number of nights they plan to stay.

Nazri was answering a question by Anthony Loke (DAP-Seremban) to the tourism ministry on the latest status of the tourism tax.

On April 6, the Tourism Tax Bill 2017 was passed by the Dewan Rakyat.

The tourism tax was fixed and charged on a per-room, per-night basis, with the amount subject to the rating of the hotel. For non-rated hotels, the tax was RM2.50; two-star, RM5; three-star, RM10; four-star, RM15; and five-star or higher, RM20.

When winding up the debate on the Tourism Tax Bill 2017 in the Dewan Rakyat, Nazri had said the tax would be able to generate RM654.62 million in revenue if there was a 60% occupancy rate at more than 11 million hotel rooms in the country.

The tax was originally meant to be implemented on July 1. It was then moved to Aug 1, and later postponed indefinitely, as the ministry wanted to give hotels a chance to develop the mechanism for the collection in conjunction with the customs department.

Today, Nazri said the implementation date of the tourism tax would be announced soon.

“The homestay industry will also not be affected by the tourism tax as it is to promote the local industry and promote the Malaysian lifestyle to foreigners,” he said, adding that the ministry arrived at this latest decision after discussions with various organisations.

The tourism tax came under fire the moment the announcement was first posted on the customs website, with the July 1 start date. The posting was later removed.

The tax was criticised by the Sarawak and Sabah state governments, while hotel industry players questioned the rationale for the implementation and highlighted the impact it would have on domestic tourism.