Single Tourism Tax system (Updated)

PETALING JAYA: States which have implemented their own local tourist accommodation-based charges will be asked to stop such collections once the federal government's Tourism Tax comes into force on July 1.

Tourism and Culture Minister Datuk Seri Nazri Abdul Aziz (pix) said this was to avoid duplication of charges on tourists that would be counter-productive and to have a single tax system.

"We will speak to the respective state governments. We will collect the tax, they don't have to. Our tax system is more efficient.

"So the state governments do not collect these fees anymore and we'll have a single system in the whole country," he told theSun today.

Nazri was responding to comments by several quarters that the implementation of the tax would be counter-productive.

Among others, the Malaysian Association of Hotels, Malaysian Budget Hotel Association and Malaysian Association of Hotel Owners said the new tax will see tourists having to pay double taxes on top of the Goods and Services Tax (GST) when they stay in hotels.

Presently, Langkawi, Penang and Malacca are already collecting their own versions of hotel and tourism fees, in addition to their room charges.

Penang charges a local government fee of between RM2 and RM3 per room per night based on the star rating of the accommodation, while Malacca has a "local heritage" charge of RM2 per night, regardless of the room type.

Langkawi charges a tourism promotion fee of between RM1 and RM9, depending on the star rating of the hotel.

Under the federal Tourism Tax, the rates start from RM2.50 per room per night at a non-rated accommodation, to RM20 each night for five-star accommodation.

In allaying concerns by stakeholders, Nazri said the revenue from the tax would be channelled back to the states for tourism-related purposes.

"Don't worry, the money will be given back to the states. We (federal) will do promotions for tourism, and the remaining money will be allocated to each state accordingly," said Nazri, without elaborating on the distribution mechanism.

On June 12, Johor Tourism, Trade and Consumerism Committee chairman Datuk Tee Siew Kiong suggested that the federal government establish a mechanism to ensure fair distribution of the revenue to the respective states.

He proposed that the quantum of the revenue distributed be in proportion to the number of hotels or places of accommodation in the states.

"Johor has no objection to the tax since other states like Penang and Malacca are already collecting a hotel tax," he added.

In an immediate response, Penang state executive councillor Chow Kon Yeow said lawmakers should always engage with stakeholders first, reports AARON NGUI.

"They should come to engage with us. They should communicate with the states since they want to collect the tax," he said, pointing out that fees collected from those staying in Penang hotels by the two local governments are now used to promote tourism in the state.

Chow said the Penang government welcomes the chance to discuss the matter with the tourism minister as it wants to know if it could be reimbursed money spent for tourism promotion activities to attract more tourists. theSun in April this year reported a total of RM19,764,972 had been collected as at September 2016 after collection started in 2014.