Kota Kinabalu: A group representing hotels and backpacker associations in Sabah want the implementation of the Tourism Tax to be deferred to March 31, 2018, saying they risk being sued by clients for not honouring rates that had already been quoted as valid until then. They said there is no way they can change the rates which are valid for a year until 31 March 2018."Should our hotels be sued by our clients for loss of business, who is going to indemnify us?
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We can't absorb the tax daily on room sales either," said the group in a statement.The group – the Sabah Hotel Association, Malaysian Association of Hotels Sabah Chapter, MyBHA and Sabah Backpackers Association – raised their concern after meeting with State Tourism, Culture and Environment Ministry Permanent Secretary Datu Rusmadi Sulai.They said hotels would also have to engage IT specialists to reprograme the accounting system to enable it to add in the Tourism Tax, which is costly.They estimated the cost to be in thousands of ringgit per hotel not to mention the training cost to be undertaken for the staff.
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"On top of that we have to pay the 6 per cent GST," they said.The other issue is that cancellations are already happening when clients are notified about the additional tax that would be imposed.
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"We hope that these issues and some minor ones can be resolved with the ministry before implementation through meetings and dialogue with the Customs Department. The Sabah Government can discuss these issues before making a decision on the matter," they added.In PETALING JAYA, hotels said they will need at least three to six months to reconfigure their front office systems to implement the tourism tax.Malaysian Association of Hotels (MAH) President Cheah Swee Hee welcomed the news that the government will be flexible with hotel operators in imposing the tourism tax in their daily transactions from July 1, the date set by the government for the implementation of the controversial tax, which has even led to BN leaders clashing.Much of the attention on the tax has been surrounding Tourism and Culture Minister Nazri Aziz's scathing criticism of Sarawak Tourism, Arts, Culture, Youth and Sports Minister Abdul Karim Rahman Hamzah after the latter urged Putrajaya to defer the tax, saying it wasn't in line with the spirit of the Malaysia Agreement 1963.But as far as the tax itself is concerned, Cheah – who previously lamented the government's lack of appropriate consultation with industry players on the tax – said hotels were still against the move to make them collect the tax, despite the government's assurance of flexibility.On Monday, Nazri said that if hotel operators couldn't implement the tax on July 1, the government can defer it to August, but Cheah said it will actually take a lot more than a month."Realistically speaking, it will take some time for hotels to implement the tourism tax as it would require the reconfiguration of our front office systems."Cheah said hotels would need a minimum of three to six months to reconfigure their front office systems, provided the mechanism for the tourism tax is clear.The mechanism for the tax, he said, was still unclear with the ministry saying the tax is included in the room rates while the Tourism Tax Bill 2017 states that it is to be charged separately."How can we even start reconfiguring our systems when matters like this are still unclear?" he asked.Similarly, Malaysia Budget Hotel Association (MyBHA) president PK Leong said he had no idea how the tax would be implemented as they were still in the dark over the mechanism.Cheah said he hoped the government would look into the memorandum sent by MAH, MyBHA and the Malaysian Hotel Owners Association (Maho) submitted recently.In that memorandum, the three organisations raised concerns on the tax rates, their role as tax collectors as well as the scope of the tax.The tax puts the burden of collecting tax only on registered hotels with more than 10 rooms."Those with fewer than 10 rooms won't have to collect tourism tax and this means AirBnB operators won't need to impose tourism tax on their customers even though the service is used primarily by the tourist market."So, ironically, it seems many tourists will actually escape the tourism tax, while locals who aren't tourists but stay in hotels when they have to travel for work or to visit their children studying in other states will have to pay."He said this made the playing field more uneven than it already was as hotels will now have to adhere to yet another regulation, while AirBnB and illegal hotel operators didn't have to while enjoying subsidised residential rates for utilities, unlike commercial businesses.Meanwhile, Leong also said it was unfair that only hotels were made responsible for collecting the tourism tax for the entire tourism industry which is expected to draw some 31.7 million tourists this year."Only 25pc of a tourist's expenses goes towards accommodation. So, why are the hotels responsible for collecting for the whole tourism industry?"What about transport and retail?" questioned Leong.The tourism tax is fixed and charged on a per-room, per-night basis, with the amount subject to the rating of the hotel.For non-rated hotels, the tax is RM2.50, two-star (RM5), three-star (RM10), four-star (RM15) and five-star or higher (RM20).When winding up debate on the Tourism Tax Bill 2017 in the Dewan Rakyat on April 6, Nazri said the tax would be able to generate RM654.62 million in revenue if there was a 60% occupancy rate at more than 11 million hotel rooms in the country.Stay up-to-date by following Daily Express’s Telegram channel.
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