Geoffrey Williams said while lower taxes were always welcome, venues, hotels and tourism activities had to be attractive too.

He advocated for a proper assessment of the impact of a tax cut on tourism.

“The increase in tourism income must be greater than the lost revenue of the tax.

“The reduction must also be passed on to visitors or employees, not into the profits of the tourism companies,” he said.

William suggested that the government consider cutting the foreign tourism tax.

“(The foreign tourism tax) raises very little revenue and is a source of annoyance and discrimination which would be better to remove,” he added.

Williams was commenting on the incentive proposed by tourism, arts and culture minister Tiong King Sing on Nov 9 in hopes of strengthening the tourism sector ahead of Visit Malaysia Year 2026.

Tiong had also suggested a special exemption for domestic tourism expenses, combined with the proposed tax reduction.

He said his ministry had held discussions with the finance ministry and relevant agencies to explore these incentives further.

Meanwhile, economist Yeah Kim Leng said given the national economy’s healthy performance this year, it was not necessary to provide incentives to boost domestic tourism spending as it would be procyclical – increasing spending in a booming economy – and might lead to overheating or inflation.

He said it would be better to consider incentives to increase investment in inbound tourism promotion, tourism infrastructure and facilities.

“Industry players could also increase spending to raise skill levels, wages and service quality to complement government efforts to enhance the tourism sector’s value-added contribution to the economy,” he said.