Opposition to “unfair” tax grows in Malaysia

Unpopular tourism tax to be enforced from September 1
The unpopular tourism tax in Malaysia will be enforced nationwide from September 1, but grievances continue to pour in from hoteliers and agents.
“It is unfair, but hotels have no choice but to charge because we have no letter in black and white from the government telling the hotels otherwise. If we don’t charge the guest, the hotel will have to pay the tax for the guest,” said Shaharuddin Saaid, executive director of the Malaysian Association of Hotel Owners.
Guests who receive complimentary rooms from hotels will also have to pay the tax. There is also some confusion as to whether budget accommodation operators with dormitories of four to six beds are going to charge guests.
“Do you charge only one person, or every guest in the room?” Shaharuddin asked. “Also with such budget accommodation where the room rates are as low as RM100, the tourism tax of RM10 per room per night is more than the Goods and Services Tax (GST) of 6%. This is unfair!”
A new update issued by the Royal Malaysian Customs Department on August 29 states: “In cases where more than one tourist is staying in the same accommodation at the same time, e.g. dormitory arrangement, and the tourism tax for that accommodation has been paid by any one of the tourists, the other tourists are not liable to pay tourism tax for that accommodation.”
Shaharuddin expects confusion in the early days of implementation, saying: “Tourists may argue with hotels and refuse to pay. We will then be made responsible and pay on their behalf. The government had also not given enough time for hotels to upgrade their accounting systems to facilitate the collection of the tourism tax. The GST should not be charged on the tourism tax but if the systems have not been upgraded properly, this may show.”
He warned that the tax would also have an impact on long-stay guests such as corporate clients. The association has proposed a cap on the number of days the tax can be applied to, regardless of the number of days the guest is staying.
TTG Asia