The government has decided to not impose the tourism tax on Malaysians, but only on foreign tourists at a flat rate of RM10 per room per night.
The tax, which was set to be effective on August 1, would apply to all hotel categories, per room per night, said Tourism and Culture Minister Datuk Seri Mohamed Nazri Abdul Aziz at Parliament.
In the previous proposal, the tourism tax was applicable to all tourists, local and foreign, at between RM2.50 and RM20 per night depending on the hotel’s rating.
In this new proposal, only foreign tourists will be charged RM10 flat per room per night in all hotel categories.
Guests in premises with five rooms or less, homestays and village stays will not be charged the tax.
Whether to postpone the implementation date of August 1 or not will be decided by the Prime Minister, said Nazri.
Although the exemption for locals would stabilise the local tourism sector, Malaysian Association of Tour and Travel Agents (MATTA) president Datuk Tan Kok Liang said that there was a need to review the lower category accommodation providers and budget hotels.
“There could be an increase of between 5% and 30% for room rates due to the tax, which would affect long-stay budget travellers,” he said.
He also added that the best date for implementation would be April 1, 2018, but he hoped more details on the collection and implementation mechanism would be announced by the Customs Department soon.
This was echoed by the Malaysian Association of Hotels president Sam Cheah Swee Hee, who said that the hotel industry was not ready to implement the tax by August 1 as systems would need to be re-programmed.
He added that the association stood by its earlier call for the levy to be collected at exit points such as airports, ports and border points.
With only 3,126 hotels registered with the ministry but more than 8,000 accommodation providers in Malaysia on sites like Agoda alone, and more than 11,000 on Airbnb, the tourism tax might drive tourists to illegally operated hotels that do not charge the Goods and Services Tax (GST) and tourism tax, said Cheah.
“If it is a flat rate charged at the exit point, the impact will not be too much,” he added.