Hotel owners association criticises Tourism Tax plan

PETALING JAYA: The Tourism Tax, which is slated for implementation this August, will only encourage tourists to book with unregistered and unlicensed hotels due to the lower cost, said Malaysian Association of Hotel Owners (Maho).
Its president Tan Sri Teo Chiang Hong said this, in turn, would result in an even lower occupancy rate and lower tax revenues among registered hotels, possibly costing the government millions of ringgit in revenue each year.
"An alternative model that is more fair and equitable, and taxes all participants in the sector would be better suited and more likely to achieve the revenue expectations of the government," he said in a statement today.
His statement came following the submission of a memorandum by Maho, Malaysian Association of Hotels (MAH) and Malaysia Budget Hotel Association (MyBHA) to the Finance Ministry, Customs Department and the Tourism and Culture Ministry, over concerns of the tax implementation.
Teo pointed that less than 15% of accommodation providers (3,126 hotels) in the country are registered with Tourism and Culture Ministry presently, and that there are no existing provisions to have the others registered.
Customs Department recently published on its website that the tourism tax would be imposed beginning Aug 1, with rates starting from RM2.50 per room each night at a non-rated accommodation to RM20 per room at a five-star accommodation.
Teo said Tourism and Culture Minister Datuk Seri Mohamed Nazri Abdul Aziz's target of collecting RM654 million and RM872 million in tourism tax for an occupancy rate was 60% and 80% respectively was also far-fetched, noting that the industry has only been able to achieve a 35% to 40% occupancy in recent years.
Teo said the the requirement to have the hotels acting as "tax collector" would also dissuade those who are currently unregistered from registering.