‘Not the right time’: Malaysia’s new tourism tax agitates hoteliers

Tourists outside Colmar Tropicale, a French-themed hotel in Bukit Tinggi, Malaysia. Source: Shutterstock/HitManSnr

SINCE the Malaysian government tabled a new tax for tourists staying at hotels in April, the responses from both tourists and hoteliers have been varied.

The new tax – to be collected by the federal government – will see a nightly rate of RM2.50 (US$0.60) to RM20 (US$4.70) based on the hotel rating. The tax will be imposed on both domestic and overseas tourists.

Confusion has arisen in cities such as Penang, Melaka, and Kota Baru where a similar hotel tax is already imposed.

Malaysian Association of Hotel Owners (Maho) executive director Shaharuddin Mohamad Saaid told local daily Sinar Harian, “This is unfair for the states involved as consumers have to pay two taxes after this and the government has to explain.”

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Meanwhile, Malaysian Budget Hotel Association (Mybha) president Sri Ganesh Michiel told Malay Mail Online he’s apprehensive about the timing of the tax roll-out.

“We are already struggling with low room occupancy… so it’s a bad time to be introducing the new tax. Also the tourism industry is huge, why only expect the hoteliers to collect?” he said.

On top of that, the disruption of home-sharing and homestay models such as Airbnb and HomeAway have rattled the hotel industry.

“Those [companies] like Airbnb, they don’t have to pay tax and this will make people [prefer them over us],” Michiel said.

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When news of the tax first surfaced, Maho told Today the new fee could add to their woes as hotel owners were still “reeling” from the Goods and Services Tax (GST) imposed two years ago.

Shaharuddin told the publication: “On top of the extra cost, there will be more (administrative) work for the employees.”