GEORGE TOWN, Nov 29 — Penang is mulling a state tax on the use of hotel rooms by local and foreign tourists in the state.

Penang State Executive Councillor for Tourism Development Danny Law Heng Kiang told the Penang Legislative Assembly that hotels in Penang have agreed to the imposition of the tax.

“The hotels have agreed to collect tax for hotel rooms provided that several conditions are met,” he said.

The hotels want the tax to be imposed on all rooms taken up by all tourists, local and foreign.

The second condition is that all hotels, including budget and boutique hotels, must impose the tax, not only a few resorts and hotels.

Law said the third condition is that the tax revenue collected must be channelled back into tourism development for the state, either through local or international promotional events and programmes.

Backbencher RSN Rayer (DAP — Seri Delima) voiced his objection, saying that it is not right to tax tourists at the point of arrival, at the Penang International Airport and the port, as they are greeted with poor facilities.

“How can we expect them to pay when the airport is in such poor condition?” he asked in reference to several incidents when the airport had flooded after a heavy downpour.

The state government had raised this issue with Malaysia Airports Holdings Bhd (MAHB) and also the Transport Ministry.

The airport was just recently upgraded in a RM250-million expansion project funded by the ministry and undertaken by MAHB.

Tourist arrivals to the state have increased annually at a rate of between nine and 10 per cent since George Town was designated as a Unesco world heritage site in 2008.

Recently, Penang Chief Minister Lim Guan Eng revealed that Penang received 4.4 million tourist arrivals for the first 10 months of 2013 and the state is expected to record between 5.2 million to 5.5 million tourist arrivals by the end of the year.

The Malaysian Association of Hotels Penang branch chairman Mary Ann Harris reportedly said 2012 saw one million hotel rooms sold in George Town and 729,334 rooms sold in the beach areas.

Later, outside the assembly, Law said the state government has been actively promoting tourism which is why the number of tourist arrivals is expected to continue rising.

When asked for details on the proposed tax, Law said it would be revealed in detail in the state Budget 2014.

Lim is expected to table the Penang Budget 2014 later this afternoon.