Joint Tourism Tax stand
Published on: Wednesday, April 26, 2017
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Kota Kinabalu: Sabah will consult Sarawak on making a joint stand on the Tourism Tax Bill that was passed in Parliament early this month in line with the autonomy that both states enjoy on certain matters.
“We’ll take a common stance with Sarawak and we’ll make an announcement later,” said State Tourism, Culture and Environment Minister Datuk Seri Masidi Manjun. Besides, he said both States also don’t depend on Tourism Malaysia but have their own tourism promotion agencies.
The Bill that was tabled by Tourism and Culture Minister Mohamed Nazri Abdul Aziz received strong objections from industry players. Nazri had earlier said that Sabah and Sarawak cannot hope for extra funding if they preferred not to implement the Act.
However, tourism players said both states had more to lose from imposing the tax on tourists than any funding cutbacks from the Federal Ministry. One industry player pointed out that all Sabah would stand to lose would probably be a mere RM20m in funding.
Prior to passing of the Bill, the Sabah Cabinet also rejected it on grounds that the move would hurt the State’s tourism industry, which has been one of the biggest contributors to its economy. The industry is also the only one that employs the most locals.
Masidi had described the proposal as killing the goose that lays the golden egg. He felt that Sabah was not ready for the tax and preferred that tourism earnings go to the State instead of Federal coffers.
Under the Act, the Government can impose and collect tourism tax from all types of premises used as accommodation for tourists.
Homestay and “kampung stay” registered under the ministry, premises managed by institutions (education), premises used for training purposes and religious institutions where such facilities are not used for commercial purposes are exempted.
In 2015, Sabah boasted tourism receipts of RM6 billion from 3 million tourist arrivals.
Meanwhile, the Sabah Tourism Federation expressed concern on the financial implications and operational issues that would be faced by tourism stakeholders in Sabah if the proposed Bill was passed.
The Federation said hoteliers feared it would cost them at least RM68,000 annually each if they were to set up a new unit just to collect the tourism tax on behalf of the government.
There are some 533 hotels in Sabah, excluding the home-stay and backpacker operators.
This would translate into RM36,244,000 salary cost alone as additional expenses for the overall industry, and still does not include the operating cost of printing and stationary to support this tax collection system that will be tasked by the hoteliers.
It said that currently all guests who check in a hotel need only to confirm their mode of payment either though internet booking, booking sites, credit cards or cash payment.
“We have no right to demand them to pay anything in excess to that. What right does a hotel have to demand such tax and stop them from entering the room if they don’t agree to pay?” the Federation asked.
It added that the hotel standard practice is to quote tours and travel agents a contract rate that will be valid from April 1st until March 31st the following year.
The federation pointed out that there are also legal implications to consider, citing an example of tourists suing their tour operators after they return to their home countries.
“Are the hotels going to be liable for any such eventualities?”
“Under such circumstances, will such overseas tour operators continue to send their guests to us?
We may even be blacklisted and suffer more consequential losses as a result of any cancellation of future businesses. The federation felt that the tourism tax would only discourage tourists from visiting the country.”
Meanwhile, launching a RM13 million three-deck marine cruiser “Luna” with a restaurant and live band, Masidi said Sabah had to live up to its reputation as a best tourism destination and can only sustain the growth by being innovative and creative.
“We are already living in a very beautiful state. Of course the natural attractions are incomparable, but the actual reason is also the friendly people of Sabah. This is really our biggest asset.
“As our greatest assets, it’s important that we continue to train and retrain players in the industry so that they can come up with new and innovative ideas to push the industry to greater heights.”
He said this also meant repeat visitors continue to increase in numbers.
“To ensure this they must find something new each time they return. That’s how and where creativity and innovation come into play to realise such development. And this must come from us. “
He commended the Amazing Borneo co-founders of the enterprise of North Borneo Cruises – Sabahans Tyan Wong, Kenji Yeo and Singaporean Lynn Tiang, all in their mid- thirties, for realising their dream, and suggested that they consider getting another such boat to expand the business.
“It is not just about their pride, but also our pride. I believe Sabahans have what it takes to continue to be in the big league of achievers and performers. What is the definition of big shot? It is about a small shot that keeps on shooting. That’s what we should be doing, we should keep on striving.”
The Minister acknowledged that Wong and Yeo chose to return to Sabah from living in Singapore and now created a tourism value product that Sabahans could feel proud about. – Leonard Alaza and David Thien