Malaysians in 3-, 4-star hotels may not have to pay new tourism tax

KUALA LUMPUR — Malaysians who stay in hotels rated three stars and below may be exempted from paying a controversial tourism tax that will be implemented on July 1, said a senior government official.

Finance Ministry Secretary-General Mohd Irwan Serigar Abdullah said the government is looking into the matter and is expected to decide on it soon, reported The Star yesterday. “There are certain categories of people, such as locals, staying at three-star hotels and below who may be exempted,” he said. “We are studying this.”

Mr Mohd Irwan added that there will not be any problems in collecting the tax, as the current tax system is handled by the Customs Department and is based on hotel ratings.

Malaysia announced in April that it will impose a tourism tax of between RM2.50 (S$0.81) and RM20 per room, per day for hotel stays from next month, triggering a backlash from the East Malaysian states of Sabah and Sarawak, as well as the tourism industry. Sarawak withdrew its representative from the Malaysian Tourism Board with immediate effect last week, as the tiff between the Borneo state and Putrajaya over the new tax escalated.

The move followed a sharp exchange of words between Sarawak’s Tourism Minister Abdul Karim Rahman Hamzah, and his federal counterpart Nazri Abdul Aziz.

Days later, Malaysia’s Deputy Prime Minister Ahmad Zahid Hamidi declared the squabble between Mr Nazri and the Sarawak and Sabah state governments settled, although he did not elaborate on the details.

Sarawak on Thursday (June 22) finally accepted the new tourism tax but Mr Abdul Karim said the tax collection from the hotels in the state should be distributed directly to the state government.

Tourists to Penang, however, will be subjected to two tourism taxes — the upcoming tourism tax and an existing charge put in place by the state.

Penang currently charges a fee of between RM2 and RM3 per room night through its local councils.

The new federal tourism tax rate meanwhile, is fixed at RM20 per room each night in a five-star hotel, RM10 per room each night for a four-star hotel, and RM5 per room each night for one-, two- and three-star hotels.

For one-, two- and three-orchid as well as non-rated accommodation, the tax is RM2.50 per room per night. Orchid is a more environmentally focused rating system.

The new policy, however, exempted non-commercial accommodation premises operated by the government, or those regulated as “homestay” or “kampung stay” facilities under the Tourism and Culture Ministry.

Mr Nazri had said the tax collected would be used to develop the tourism industry and make it even more competitive. Revenue from the tax would come up to RM654.62 million if the overall occupancy rate for the 11 million “room nights” in the country is 60 per cent, he added. AGENCIES