Malaysia: Proposed tourism tax riles hotel owners

The rate of the proposed tourism tax hasn’t yet been determined, but it was reported authorities were looking at RM25 per room per night for a five-star hotel. Source: Shutterstock

THE Malaysian government has tabled a proposal to tax tourists staying at any type of accommodation in the country.

The Bill, if approved, could allow the government to charge tourists a nightly rate for staying in a hotel. The rate hasn’t yet been determined, but it was reported authorities were looking at RM25 per room per night for a five-star hotel.

The fee would vary according to star ratings of the respective properties, with unrated accommodation rates reportedly starting from RM2.50 per night.

The Malaysian Association of Hotel Owners (Maho), told Today if approved, the tax could add to their woes as hotel owners are still “reeling” from the Goods and Services Tax (GST) imposed two years ago.

Maho executive director Shaharuddin M. Saaid told the publication: “On top of the extra cost, there will be more (administrative) work for the employees.

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“The ministry had called for a meeting to inform us (industry players) about the plan … They told us it was more or less decided and initial implementation date after Hari Raya Haji (last year).”

The tax will likely affect domestic tourism as well, especially for those traveling into Kuala Lumpur.

Malaysian Association of Hotels (MAH) president Cheah Swee Hee told TTG Asia: “This will not encourage domestic tourism, which is just as important for the economy. Also, what are the regulations in place to ensure accommodation providers such as Airbnb abide by the regulations?”

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According to Malaysia’s Tourism and Culture Minister Nazri Aziz, the collected tax – which could amount to RM654.62 million (US$147.47 million) if the overall occupancy rate for the 11 million “room nights” in the country is 60 percent – will be used to develop the country’s tourism industry.

The proposal comes amid the weakening of Malaysian ringgit and lower oil revenues.