KOTA KINABALU: The exemption from Tourism Tax (TTx) for Malaysians will spur domestic tourism growth, said Sabah Tourism, Culture and Environment Minister Datuk Seri Masidi Manjun.
Masidi said the exemption would encourage Malaysians to travel domestically.
“This is great news for domestic tourism. The country's tourism industry has proven to be resilient even during bad economic times.
“In fact, the tourism industry has been the savior of our national economy during this challenging period. Good or bad times, people still travel.
“They merely adjust their destination to suit their financial capacity and in most cases, they would opt for family holidays at home (Malaysia).
“For this reason alone, we need to do more to encourage domestic travel,” he said.
Masidi noted that there were over 400 domestic flights weekly between Kota Kinabalu and the rest of the country.
Currently, two thirds of tourists that come to Sabah are Malaysians, he added.
“They are good spenders, just like the foreign tourists. Travel barriers including unnecessary taxes should be abolished to encourage Malaysians to travel within their own country,” said Masidi.
Meanwhile, the Malaysian Association of Tours and Travel Agents (Matta) said the exemption for all Malaysians would stabilise domestic tourism as it is a relief for essential travellers on business, medical, religious, and education purposes.
“Matta had expressed concerns on the TTx fee on Malaysians and we must acknowledge our appreciation to the Minister of Tourism and Culture (Datuk Seri Nazri Aziz).
"We hope the collection and implementation mechanism will soon be announced by the Customs Department to ease uncertainty in the market, and the implementation date on April 1 next year would be an ideal scenario," said Matta president Datuk K.L. Tan.
Reducing the tax from RM20 to RM10 for five-star and four-star hotels will minimise any adverse impact on the high end industry, he added.
“However, we need to review the lower class category accommodation providers and budget hotels as the increase may be between 5 per cent to 30 per cent of the room rate. Long stay budget travellers who are price sensitive may be affected. Overall, it is a good compromise,” he said.
In Parliament today, Nazri said the TTx would only be applied to foreign tourists, with Malaysians fully exempted from paying the tax across all classifications of hotels.
Once enforced, the ministry will impose a RM10 flat rate for all hotels for foreign tourists and the Customs Department will handle the collection of tax.