Budget hoteliers plead to raise income threshold
Published on: Monday, May 06, 2019
By: Leonard Alaza
KOTA KINABALU: Members of the Malaysia Budget Hotel Association (MyBHA) Sabah Chapter fear a slow demise of their business unless the Government agrees to increase their annual income threshold subject to the Sales and Service Tax (SST) from RM500,000 to RM1.5 million.
They raised the issue during their annual general meeting recently, saying most of them have been struggling even to make half a million ringgit profit a year, and to pay SST on top of that would only cause them to bleed more.
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“We’re dying,” said MyBHA Sabah Chapter Chairman James Ong.
He said their plea to the Government to consider increasing the figure is justified in view of the challenges the operators have been facing.
“Already we’re struggling to make half a million ringgit in annual sales, we still have to pay salaries of our staff, utility bills, maintenance and so on.
“The income threshold for coffee shops is RM1.5 million. So, I believe the figure for budget hotels deserve to be increased because of the many challenges we’re currently facing,” he said.
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He noted that their national umbrella body had submitted a formal appeal to the Government on the matter.
Ong said budget hotels had been subjected to the same annual income threshold under the Goods and Services Tax (GST) regime, which affected their business.
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“Our business has in fact been declining since 2014. It has gone down by 15 per cent. It’s been hard for us to survive,” he said.
Other than the SST issue, members during the meeting also highlighted other concerns such as on the issue of unregulated accommodation providers, minimum wage, tourism tax and high utility rates.
Meanwhile, MyBHA President PK Leong, who attended the meeting which was sponsored by EZEE Technosys (M) Sdn Bhd, Traveloka and Paydibs Sdn Bhd, reminded members to stay united in order to maintain room rates and to survive in this challenging business environment of the digital age.
He encouraged member hotels to practise bulk purchase among themselves in order to get good discounts, especially during the trying times.
He also advised MyBHA Sabah to tap into the tourism funds allocated from the collection of tourism tax for training purposes.
He added that the Ministry of Tourism and Culture (Motac)-led star rating exercise shall be accompanied by a MyBHA representatives during inspection of their member hotels.
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