GEORGE TOWN: A hotelier group has asked the government to give hotels enough time to make adjustments to their systems before it imposes the tourism tax on foreigners.
Khoo Boo Lim, who chairs the Penang chapter of the Malaysian Association of Hotels (MAH), said hoteliers needed time to update their accounting software and cashier and management systems. He called for a “grace period” without saying how much time was needed.
Tourism and Culture Minister Nazri Aziz announced yesterday that foreigners would be taxed RM10 per room per night, regardless of the star rating of the hotel. Malaysians are exempted.
The tax, according to an earlier announcement, was to plug the deficit in the tourism and culture ministry’s advertising budget.
“Good to hear that they will charge only foreign tourists and not Malaysians,” Khoo told FMT. “But we have yet to hear about how this RM10 will be collected. Hotels will need to work extra to adapt to the new tax and may incur extra expenses to reprogramme our management software.
“We also need to inform our travel agents because hotel contracts are normally negotiated way ahead.”
The government initially proposed to tax both foreigners and Malaysians at the following rates: RM2.50 for non-rated hotels and RM5, RM10, RM15 and RM20 for two-star, three-star, four-star and five-star hotels respectively.
Nazri told the Dewan Rakyat last April that revenue from the tax was expected to reach RM654.62 million a year if there was a 60% overall hotel occupancy across the country every night.
The initial plan was to start imposing the tax on July 1, but the effective date has been postponed indefinitely due to opposition from the tourism industry as well as the Sarawak and Sabah governments.
MAH president Cheah Swee Hee said in April that business was slow. He said occupancy rates had dipped to less than 40%.
According to Tourism Malaysia’s MyTourismData portal, Malaysia had 4,799 hotels and 304,721 hotel rooms in 2015.
Yesterday, MAH’s Sabah and Labuan chapter urged the government to let the Customs Department collect the tax at the nation’s exit points instead of from hotels.
Speaking in Kota Kinabalu, the chapter’s chairman, Thomas More Willie, said it wasn’t yet clear whether hotels would have to collect the tax from their guests.
“If this task is given to us, we’ll need to install new systems and equipment,” he told FMT. “We will need to spend more money. This is really a big issue for hotels.
“If the Customs Department collects it at the nation’s exit points instead of from hotels, they can start collecting it as soon as possible or whenever they’re ready.
“Therefore, we urge the government to do this instead of having hotels collect it on site.”
Willie suggested that the government defer the implementation date to next April at the earliest because a lot of hotels already had contracts with overseas partners and these would expire on March 31.
“Airlines review their fares every April 1 and we in the hotel industry follow this timing when setting the time frame for our contracts,” he said.
“It will be a major problem for us to renegotiate the contracts to accommodate the new tax. Most probably, our partners wouldn’t want to renegotiate.
“So we’ll need to absorb the tourism tax, something which we don’t really want to do.”
Malaysian Association of Tour and Travel Agents (Matta) president Tan Kok Liang said the RM10 flat hotel tax and exemption given to Malaysians was a “good compromise” by the government.
“We had expressed concerns about the tourism tax on Malaysians and we are glad that the government has taken note of our views.”
Malaysia Inbound Tourism Association (Mita) president Uzaidi Uzanis said he would like to thank Nazri for listening to feedback from industry players.
*Afieqa Fariza also contributed to this report.