IDEAS director of research Ali Salman said this in response to a report carried by Channel NewsAsia (CNA) earlier today on the details of the new tourism tax published on the customs department website.
“Although Malaysia has maintained its position in the top 25 most competitive economies in the world, over-regulation and increased taxation may cause it to slip down in competitiveness.
“This new tax does not come at a good time with the tourism industry just picking up and with inflation being at an all-time high,” Ali said.
He added that the experience from other countries has shown how such taxes have an impact on the tourism industry.
“The tourism tax will only serve to increase costs for tourists and in fact, the experience in countries like Tanzania shows how sensitive tourists are to changes in price.
“Instead, the government should review its regulatory measures to make it easier for hoteliers to comply with regulations,” Ali said, adding that there was duplication in the tourist industry where there is a tourism agency at both the federal and state level.
According to CNA, details in the customs website state that the new hotel tax starts from RM2.50 per room each night.
The hotel tax is part of the Tourism Tax Act, passed by the Dewan Rakyat on April 6 this year.
According to the tourism and culture ministry, the revenue from the tax will be earmarked for tourism promotion.
The tax for non-rated hotels will be RM2.50, while the tax for two-star, three-star, four-star and five-star hotels will be RM5, RM10, RM15 and RM20.
Ali warned the government that it would not be able to meet its target for tourist arrivals with the new tax.
“If the tourism ministry’s target for the year is to increase tourist arrivals from 26.8 million to 31.8 million then the government needs to be realistic and should not introduce the tax at this delicate time,” he said.
Tourism and Culture Minister Mohamed Nazri Aziz reportedly said after the bill was passed that the revenue from the hotel tax would be in the region of RM654.62 million if the overall occupancy rate for the 11 million “room night” in the country can achieve 60%.
Meanwhile, CNA reported that the page on the customs department with the details of the hotel tax was apparently taken down later this morning, after its initial report was published.