GEORGE TOWN, May 12 — The Penang government’s move to impose a levy on hotel rooms is illegal as it violates the state constitution, state Opposition Leader Datuk Jahara Hamid said.
Jahara insisted that the state has no jurisdiction to collect taxes at all unless it has approval from Putrajaya.
“If we look at the state constitution, under Part III, Section 28, it says that no taxation shall be collected by the state unless authorised by the law,” she said.
The Telok Ayer Tawar state assemblyman said this means the state government must table the proposal to impose the levy on hotel rooms before implementing it.
The state proposed the levy in its 2014 Budget and it was implemented in June 2014.
The room taxes, between RM2 and RM3 per hotel room per night, were imposed on all hotels from one star and above.
Jahara noted that the state has since collected the levies for more than five million nights from hotel rooms in the state.
“In the budget speech, it was announced as a levy which is a form of taxation but in a reply to Sungai Acheh state assemblyman Datuk Mahmud Zakaria’s oral question, they called it a fee so which is which?” she asked when demanding an explanation from the state.
She said if it is a levy, the state government has to legalise it by tabling it at the legislative assembly.
Jahara added that she believes even the state government is confused as to whether the room charges collected are considered a kind of levy or a fee.
The levy, announced in November 2013, was to enable the state government to collect funds to further develop the tourism industry in the state.
