Penang to defy federal call on single tourism tax

GEORGE TOWN: Penang will continue to collect the Penang Local Government Fee even after the Tourism Tax comes into force on July 1.

Chief Minister Lim Guan Eng (pix) said his administration would continue with the collection of the fee which began in 2014.

He said the monies collected were important to promote tourism in the state and pointed to the increasing number of tourist arrivals as proof of success.

“There has been an increase every year,” he said in a press conference today in response to Tourism and Culture Minister Datuk Seri Nazri Abdul Aziz telling states to stop collecting accommodation-based charges once the tax was implemented to avoid duplication of charges on tourists which would be counterproductive and to have a single tax system.

Rates under the new tourism tax start at RM2.50 per room per night for non-rated accommodation and up to RM20 per room per night for five-star hotels.

In Penang, those staying in hotels have to pay RM3 per room for hotels above four stars and RM2 per room for hotels below three stars. Langkawi and Malacca have similar fee structures in place.

Lim also said the matter of states stopping their own collections was not raised when the law was debated in the last Parliament sitting.

He said this was something new and there was no communication from the ministry on the matter and would wait for an official communique.

Lim said most states wanted assurances the money collected under the tax would be channelled back to the states.

“Can there be this assurance? There are also suggestions this is only imposed on foreign tourists,” he added.

Lim said the quantum between the federal tax of RM20 and the fee of RM3 was a big difference when asked if double taxation occurred.

“I believe not many will feel RM3 is big but RM20 is different,” he said.

On a separate matter, Lim said he would let police handle the matter of curbing illegal gambling activities in the state after Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi ordered a crackdown on such activities on Tuesday night.

He also said he would leave it to Ahmad Zahid to identify political parties financed by illegal gambling masterminds.

He said normally such allegations would be targeted at opposition parties, but noted no names were revealed

“It is up to the Minister to identify, we leave it to the Minister to state. We are not involved in illegal gambling or involved in issuing gambling licenses,” he added.

Lim earlier gave RM10,000 each to the Police and Armed Forces, as part of the annual Raya contribution, to Penang police chief Datuk Chuah Ghee Lye and 6th Brigade Headquarters Chief of Staff Lieutenant Colonel Mohd Yusoff Nor.