Departure levy may affect Sabah tourism: Satta
Published on: Wednesday, August 14, 2019
By: Larry Ralon

KOTA KINABALU: The Sabah Association of Tour and Travel Agents (Satta) and Sabah Hotel Association fear that the Sabah tourism industry will be greatly affected by the implementation of the departure levy effective Sept. 1. 

Satta President Datuk Seri Winston Liaw (pic) said for Sabah, the amount of departure levy to be collected may only be in tens of millions but its impact on State tourism which generated RM8.342 billion in tourism receipts last year would be greater. 

He said calculation using last year’s statistics on tourist arrivals and spending in Sabah (if the departure levy is added) came up with an estimated RM24,476,824 to be collected from departing tourists. 

“This is compared to the total tourism receipt (for 2018) which is RM8.342 billion, and which is expected to continue increasing this year. The amount to be collected will not be that much, but its implementation will greatly affect the whole State tourism, including the revenue to be made by this industry, of which 95 per cent of its workforce are local Sabahans. 

“We fear that if we put more pressure on the tourists (by imposing another tax) they will feel discouraged or even stop from coming to Sabah,” he told a press conference at his office in Api Api Centre, Tuesday. Sabah Hotel Association Honorary Advisor, Christopher Chan, was also present. 

Liaw said they know other Asean countries are also imposing departure levy, but these countries are long established tourist destinations and imposed their departure levy long time ago, and have long established tourism products.  

“Furthermore, the current world economic and political situations like the US-China trade war and the riot in Hong Kong are affecting other countries including in this region.

“Even the decline in China’s GDP also makes the Chinese concerned over the pricing. When the GDP comes down, it means people are not making as good money as before, so they will be price conscious,” he said.

Liaw said they supported the concerns raised by Chief Minister Datuk Seri Mohd Shafie Apdal and State Tourism, Culture and Environment Minister Datuk Christina Liew on the implementation of the departure levy and its impact on Sabah tourism. 

“We support the State Government to not wanting the departure levy implemented in Sabah and hope the Federal Government will exempt Sabah,” he said. 

In a ministerial order gazetted by the Federal Government on July 31, Finance Minister Lim Guan Eng set out the departure levy rates depending on the destination abroad and whether the flight is economy class. 

Those flying from Malaysia to Asean countries will have to pay either RM8 as an economy class passenger, or RM50 if they are not flying economy. Those flying out from Malaysia to other countries outside of the Asean region will be charged a departure levy of RM20 if they are flying economy, and RM150 if they are flying other than economy class.  

Economy class refers to flights that are advertised and sold by airlines using economic terms or their equivalent, or having the lowest prices when compared to other packages, the Departure Levy (Rate of Departure Levy) Order 2019 explained. 

Separately in another order dated July 31, Lim said the departure levy will not be imposed on infants and toddlers aged below 24 months, or pedestrians. Also exempted from paying the departure levy are aircraft passengers transiting via Malaysia, namely, if they arrive in Malaysia from abroad and leave (whether it is in the same or different aircraft or with the same or different flight number) Malaysia to the next destination with the transit period not exceeding 12 hours. 

Both Liaw and Chan also agree with reports that said besides the potential direct effect on tourism and aviation, the departure levy might potential hard the wider economy as well. 

“The report said with FDI and trade being increasingly intertwined with air transport, both may potentially be affected by the new levy when considering the long run impact. This new departure levy will threaten the position of Malaysia both within Asean as well as the wider international aviation and tourism market by raising air ticket prices and potentially creating a deadweight loss for society,” said Liaw. 

He said it was also reported that the Malaysian tourism’s positive trend of growth might be at its end, as statistics provide evidence of a reduction in tourism arrivals of 3pc in Malaysia for 2016-2017 and this decline has led the Tourism Ministry to reduce arrival expectations by 17pc for the years leading up to 2020. 

“It was reported that the loss of tourism in Malaysia might be further magnified by this levy,” he said, adding that despite this tourism in Sabah is actually booming and thus this should be maintained without putting pressure like the levy that will upset the State effort to continue boosting its tourism industry.  

Meanwhile, Satta totally agree with the State Government plan to build a new airport in Kimanis. 

“The new airport has to be built as the Kota Kinabalu International Airport (KKIA) is already congested,” said Liaw, hoping at the new airport there will be separation between the domestic and international halls, unlike at the present KKIA which is still confusing for domestic and international travellers. 

Hoping the new airport will not be built too far away from Kota Kinabalu, he believe the presence of the new airport will help Kota Kinabalu to grow further as the present KKIA site may be vacated and developed.   


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