KUALA LUMPUR — The Malaysian Association of Hotels (MAH) has called for transparency on how the tourism tax collected from foreign guests is spent.
Hotels have been tasked by the government to collect this tax since 2017 and to remit it to the Customs Department, but there is little information on the money beyond that.
“It is crucial that the collected funds are transparently disclosed and reinvested back into the tourism industry, specifically for infrastructure maintenance, upgrades, and promotional incentives that benefit hotels and the broader tourism landscape, MAH said in a statement.
The tourism tax of RM10 per room per night has been imposed on each tourist staying at any accommodation premises within Malaysia, under the Tourism Tax Act 2017.
Responding to the government’s RM550 million allocated for tourism under Budget 2025, MAH said it was welcomed but noted several other concerns for the sector.
One, is the increased minimum wage from RM1,500 to RM1,700 effective February 1, which would further exacerbate operational costs.
The wage increase also impacts overtime rates during weekends, public holidays, and peak hours, adding additional strain on financial resources, the hotel group added.
Another concern is the lack of targeted tax incentives, as hoteliers had hoped for measures to alleviate the pressing operational costs.
“Specifically, (there is) lack of mention regarding tax exemptions for 4- and 5-star hotels under the ‘Pioneer Status
and Investment Tax Allowances’… a missed opportunity to encourage further investment in the sector” MAH said.
Budget 2025 also appears to be a missed opportunity to implement a policy on green and sustainable practices for the hospitality industry, which MAH has called for so as to align with government goals for a sustainable tourism industry by 2030.
“Without special incentives, it will be challenging for industry players to transition effectively towards these goals,” it added.
In his budget speech, Prime Minister Datuk Seri Anwar Ibrahim said the RM550 allocation was earmarked for the Asean Tourism Forum 2025 and Visit Malaysia Year 2026.
MAH president Datin Christina Toh, however, said the association hoped for additional support mechanisms to empower the hospitality sector to ensure its sustainability. – October 22, 2024