5,000 Malaysian hotels start imposing tourism tax

Tourists walking around Merdeka Square in Kuala Lumpur.
Tourists walking around Merdeka Square in Kuala Lumpur. PHOTO: THE STAR

KUALA LUMPUR • •Some 5,000 hotels around Malaysia have started implementing a new tourism tax for foreign visitors.

Foreign tourists are charged a flat rate of RM10 (S$3.20) per night per room, while Malaysians and permanent residents are exempted.

"We will impose a RM10 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," Tourism and Culture Minister Nazri Aziz told Parliament last week, as quoted by The Star newspaper.

He said his ministry had estimated that the government would be able to collect RM210 million a year, based on an average occupancy rate of 60 per cent of the 237,391 rooms currently registered with the government.

The plan to introduce the tourism tax had been controversial, especially in Sabah and Sarawak, which were worried fewer tourists would visit the two East Malaysian states.

The government had initially planned to charge between RM2 and RM20 per night, depending on the type of accommodation.

Malaysian Association of Hotels president Sam Cheah Swee Hee said hotel operators started charging the tourism tax on Friday.

"Not all hotel operators are ready. We will do it manually until the system is ready," he said. He added that hoteliers would submit their tax collection to the Customs and Excise Department by next month.

The department is taking a "friendly approach" to encourage hotels and lodging operators to register for the tourism tax, said its director-general, Datuk Seri Subromaniam Tholasy. "We will not be harsh as the announcement of the tax came a little late," he added.

The government announced early last month that the tourism tax was to be enforced from Friday.

Mr Subromaniam said the department would try to contact hotel operators that have not registered, rather than chase them to quickly do so. The number of registered accommodation providers so far is 5,000, out of the estimated 10,000 establishments nationwide. "We are giving hotel operators another month. We expect all to register with us by the end of September," he added.

Bernama news agency reported that hoteliers must display the newly introduced tax rate separately from the room rates.

Malaysian Association of Hotels (Sarawak Chapter) honorary secretary-general John Teo Peng Yew said hotel and resort operators need to adhere to the new ruling, following a recent meeting with the Finance Ministry and the Customs and Excise Department.

A version of this article appeared in the print edition of The Sunday Times on September 03, 2017, with the headline '5,000 Malaysian hotels start imposing tourism tax'. Subscribe