KL to go ahead with tourism tax after ministers settle dispute

PUTRAJAYA • The spat over a Malaysian tourism tax that pitted Tourism Minister Nazri Aziz against the Sarawak and Sabah governments has been put to rest, said Deputy Prime Minister Ahmad Zahid Hamidi yesterday.

He said the controversy was raised during the weekly Cabinet meeting on Wednesday and it has been agreed that the tax will be implemented, but that no more public statements will be made about it.

Sarawak and Sabah opposed the tourism tax, but Datuk Seri Zahid said it will be carried out as the promotion of tourism requires funds.

"The Prime Minister chaired the Cabinet meeting and we decided that the issue is resolved, and that no more statements should be made by federal or state leaders.

"I personally met the chief ministers of Sarawak and Sabah on Wednesday. This chapter is closed. So let's open a new one," he told a news conference.

The tax on accommodation is set to be levied nationwide from July 1, at between RM2.50 (80 Singapore cents) and RM20 per room per night, depending on the star rating of the hotel.

The government says proceeds from the tax will be reinvested into the tourism industry.

Sarawak officials have said that the tax is unnecessary for the state because it runs its own tourism- promotion programmes. The state's representative quit the Malaysian Tourism Board.

Sabah politicians also stood up against the new tax.

The tax issue became a controversy when Sarawak Tourism, Arts, Culture, Youth and Sports Minister Abdul Karim Rahman Hamzah called for the federal government to defer the implementation of the tourism tax in Sarawak and Sabah.

In response, Datuk Seri Nazri chided Datuk Abdul Karim over his remarks.

Putting a lid on the issue, Mr Zahid said: "We feel that we need more funds for tourism-promotion programmes. There are some states that make a lot of tax collection, and some make little." He did not say how much money was spent on tourism-promotion programmes.

He also said that the tourism tax had already been approved by the federal Parliament.

"We have closed the book. Now our focus is to start a new chapter," he said, according to the New Straits Times newspaper.


A version of this article appeared in the print edition of The Straits Times on June 16, 2017, with the headline 'KL to go ahead with tourism tax after ministers settle dispute'. Print Edition | Subscribe