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Malaysians to be exempted from proposed tourism tax

KUALA LUMPUR — Malaysians will be exempted from the tourism tax imposed by the government as it will only apply to foreign tourists, said Putrajaya yesterday.

The Petronas Towers in Kuala Lumpur. Malaysians will be exempted from the tourism tax imposed by the government as it will only apply to foreign tourists, said Putrajaya on Wedensday, July 26. Photo: www.freeimages.com

The Petronas Towers in Kuala Lumpur. Malaysians will be exempted from the tourism tax imposed by the government as it will only apply to foreign tourists, said Putrajaya on Wedensday, July 26. Photo: www.freeimages.com

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KUALA LUMPUR — Malaysians will be exempted from the tourism tax imposed by the government as it will only apply to foreign tourists, said Putrajaya yesterday.

The announcement came after the proposed tax drew criticism from the East Malaysian states of Sabah and Sarawak, which are largely dependent on the tourism industry, as well as from hotel operators.

Tourism and Culture minister Nazri Aziz said yesterday: “We will impose a RM10 (S$3) flat rate from five-star to zero-star hotels for foreign tourists, and Malaysians will be exempted from the tax across all classifications of hotels.”

He also said the tax would not be imposed on establishments with fewer than five rooms. Homestays registered with Tourism Malaysia, which promote the country’s tourism industry, would also be exempted, he added.

The minister was responding to a question in Parliament from Mr Anthony Loke, an opposition lawmaker, on plans to standardise the tourism tax rate and whether locals would be exempted.

“The tourism tax that is to be implemented soon will not have any major (negative) impact on tourist inflows considering the ringgit is low at the moment compared to the US or Singaporean currencies,” Mr Nazri said, adding that countries that have earlier imposed taxes on visitors, including Singapore, Thailand and the United States, have actually recorded healthy growth in their tourism sectors.

“Based on WTO (World Tourism Organisation) records, the (tourism) performance of the respective countries ... instead got better due to their ability to finance improvements in facilities and infrastructure for their tourism sector,” he said.

He said countries such as Singapore, Thailand and Japan saw their tourist inflows increase by 24 million to 29 million, 11 million to 13 million and 13 to 19 million respectively from 2014 to 2015.

The Malaysian tourism tax, passed in Parliament earlier this year, will kick in on August 1. Initially, the charges were said to have been set between RM2.50 and RM20 a night, depending on the hotel rating.

The new tax drew criticism, primarily from budget hotel operators out of fear that it would push tourists towards rental platform operator Airbnb. Sarawak withdrew its representative from the Malaysian Tourism Board, as the tiff between the Borneo state and Putrajaya over the new tax escalated. But it later declared that it would accept the implementation of the tax.

Subsequently, the government said late last month that it would consider exempting Malaysians who stay at hotels that are rated three stars and below from the controversial tax.

The government’s decision to exempt Malaysians from paying the tourism tax is proof that ruling Barisan Nasional coalition cares about the people, Malaysian Tourism Promotion Board chairman Siew Ka Wei claimed yesterday. “The government does listen. The minister and the prime minister, obviously they listen to all the issues as to the feedback and the consultation between the tourism board and other parties. That’s how this decision was taken,” he told Malay Mail Online.

Mr Nazri added that the Attorney-General’s Chambers and the Royal Customs Department are preparing the last technical details of the tax collection system. Prime Minister Najib Razak is scheduled to make the announcement soon. AGENCIES

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