Don’t replace tourism tax with departure levy, says Sarawak minister

The departure levy, proposed in Budget 2019, was originally scheduled for implementation on June 1.

KUCHING: Sarawak’s tourism minister has opposed any move to replace the tourism tax with the departure levy, saying this would affect the country’s tourism industry, resulting in losses for all states.

State Tourism, Arts, Culture, Youth and Sports Minister Abdul Karim Rahman Hamzah said he is aware of the government’s plan to implement the departure levy after the haj season in September.

“In the event that the departure levy replaces the tourism tax, all states will suffer as there won’t be any provision for returns, unlike with the tourism tax,” he told FMT, adding however that he doubted any exchange would take place.

Last month, Prime Minister Dr Mahathir Mohamad said the federal government had agreed to give 50% of the tourism tax revenue to state governments.

The tax, imposed in August 2017, sees foreigners staying in hotels or private accommodation charged RM10 per room per night.

The departure levy, meanwhile, was proposed in Budget 2019. It was originally scheduled for implementation on June 1.

Karim said while the levy might be good for the government’s coffers, it would place a burden on locals and tourists alike.

Industry players had also voiced concern over the possible impact of the levy, saying it could hit tourist arrivals and make Malaysia a less competitive destination unless proper studies are done.

Karim agreed, saying prospective tourists would opt for other holiday locations like Indonesia, Thailand, Cambodia, Vietnam or the Philippines if Malaysia becomes a less favourable destination.

Former Sabah tourism, culture and environment minister Masidi Manjun said if the departure levy is imposed, Putrajaya should allocate a fair portion of revenue to the state.

“The principle is the same (as tourism tax sharing), only the mechanism is different,” he told FMT.

Masidi, who is Karanaan assemblyman, added that the collection for the departure levy would be higher since it will be imposed on all international travellers including Malaysians.

“Depending on the percentage they give to the state, our share should be higher than that of the tourism tax,” he said.