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Tourism Tax is deferred
Published on: Wednesday, June 28, 2017

Kuala Lumpur: The planned tourism tax will be deferred until August 1, Tourism and Culture Minister Nazri Abdul Aziz said (pic).

Nazri also said the tax, which was to be enforced on July 1, will only affect foreigners staying in all types of hotels while Malaysians staying in hotels that are rated three-star or below will be exempt.

The Padang Rengas MP said the tax would be divided into four categories – charges for five-star hotels would be RM20, RM10 for four stars, RM5 for three stars, and RM2.50 for two stars and below.

When asked if the taxes will be diverted to the respective states where they were collected, Nazri said "for that you'll have to ask Customs (Royal Malaysian Customs)", adding that the agency was in charge of the tax.

Meanwhile, State Tourism, Culture and Environment Minister Datuk Seri Masidi Manjun said preparation has yet to be laid out for collection of the tax.

"To my understanding there has yet to be any registration, then how is it going to be collected.

"We have to prepare all the logistics first, before they can start collecting.


"And so far, from what I was informed, no hotel has been asked to register yet," he said when met at the Hari Raya Open House hosted by Chief Minister Datuk Seri Musa Aman and the State Cabinet at the Likas Sports Complex, on Monday.

On the delay of implementation of the tax in Sabah, he said only the Customs Department can confirm it as the department is the collecting agency for the tax.

"I am only saying that I do not see any preparation for it to be implemented on July 1."

He also reiterated that he will be meeting his Sarawak counterpart on common grounds for a joint proposal.

"The Tourism Act itself can be modified to suit or to give better advantages for Sabah and Sarawak as well as the whole country.

"We have not reached the level of discussing the disbursement of collection as we are not even sure what is the sharing formula but I am meeting with my counterpart in Sarawak with an open mind.


"During the meeting, we will try to establish the facts and find ways on how we can work together.

"It would not only be easier for us if we submit a joint proposal but also easier for the Federal Government to make a decision," he said.

Masidi was previously reported as saying that the State Cabinet accepted and took note of the merits of the Tourism Tax Act 2017.

However, he said the State Cabinet felt there is a need for further deliberations and clarity on some key issues of the Act to ensure the State's tourism industry benefits from it.

He was also reported as saying that Sabah wants to contribute ideas and proposals to fine-tune certain provisions of the Act to strengthen the tourism industry, especially when the industry is very resilient and at times the saviour of the nation's economy during challenging time.

The tax was scheduled to be enforced July 1. The Tourism Tax Bill 2017 was approved by majority vote during the last session of Parliament.


Regulated by the Finance Ministry and the Customs Department, the tax is charged at a specific rate on tourists staying at any accommodation premises provided by an operator of accommodation premises where it has been registered under subsection 31C(1) Tourism Industry Act 1992.

However, tax exemption is available for "homestay" registered with Tourism and Culture Ministry (Motac), "kampung stay" registered with Motac, accommodation premises established and maintained by religious institutions not for commercial purposes or accommodation premises with less than 10 rooms.

The tax is mandatory for both local and international tourist visiting any place in Malaysia for purposes including recreation or holiday, culture, religion, visiting friends or relatives, sports, business, meetings, conferences, seminars or conventions, studies or research, any other purpose which is not related to an occupation that is remunerated from the place visited.

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