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Tourism tax: another instance of poor planning

  • Lack of comprehensive planning has become a hallmark of the Malaysian government.

Sin Chew Daily

The war of words over tourism tax between culture and tourism minister Mohd Nazri and Sarawak tourism, arts, culture, youth and sports minister Abdul Karim has been joined by other federal ministers hailing from East Malaysia, making the incident more of a public concern now.

Unfortunately in the midst of the verbal exchanges, the core issue -- how the entire tourism tax mechanism is going to operate -- has been largely overlooked.

The government has announced that tourism tax will be imposed from July 1, but with only two weeks to go before its official implementation, people know very little of the details and how it will operate, thus more questions from the uninformed public. This is perhaps one of the reasons the measure has incurred so much opposition.

What we currently know best about the tourism tax is that hotel operators will have to charge between RM2.50 and RM20 for each room nightly based on their star ratings. As for the other details, we don't seem to have a clear picture from the authorities.

However, according to the latest information we have, the government is mulling two different tax structures, for Malaysian citizens and foreign tourists. Under this mechanism, Malaysians staying at 3-star hotels or below are exempted from paying tourism tax. They will only be charged if they stay at 4-star hotels and above. As for foreigners, they have to pay tourism tax whatever hotels they stay in.

Of course, this proposal is still being studied and no decision has been made yet.

In addition, Nazri also mentioned later that the tourism tax collected will be returned to individual state governments for the purpose of developing the tourist industry. Similarly, no details have been furnished.

The cabinet has been discussing the tourism tax issue ever since it was first announced, and Nazri has been instructed to provide clear explanation to the relevant parties on this matter.

Indeed, to the hospitality industry and the general public, there are simply too many things we don't know about this new tax, and the minister has every responsibility to clear our doubts so that we know how the tax is going to be imposed and utilized. As for the distribution of tax revenue, it remains the center of the question, and it is imperative that the government provide a clearer explanation on this.

The tourism tax controversy has been going on for some days, and the spat between the ministers is unfortunately stealing the limelight. This is not going to help clear the doubts over the implementation of tourism tax at all.

It is time for the ministers to stop their quarrels and focus on the expounding of the new tax. Compared to their arguments, I believe the hoteliers and tourists are more interested in the details of tourism tax and how it will help promote the development of the country's tourist industry.

This incident has once again highlighted the government's lack of comprehensive planning. The details have yet to be finalized two weeks before the actual implementation.

The government must draw a lesson from this matter to plan well ahead and explain to the involved parties and public before introducing any new policy in the future so as to avert any unnecessary misunderstanding and backlash.


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