KUALA LUMPUR, July 27 — Tourism groups have lauded the move to exempt locals from paying the tourism tax for their accommodations.

Malaysian Inbound Tourism Association (MITA) organising chairman Uzaidi Udanis said the exemption announcement by Tourism and Culture Minister Datuk Seri Mohamed Nazri Abdul Aziz was timely.

 He also concurred with Tourism Malaysia chairman Datuk Siew Ka Wei’s views that the tax was essential in funding promotion campaigns to draw more foreign tourists to the country.

“The ringgit’s depreciating value would work against us in this case as it becomes more expensive to put up marketing and promotional advertisements abroad, so it has to stay in place for foreign tourists,” he told the Malay Mail.

Adding that he viewed the tourism tax as a sort of joint venture between the government and the private sector, Uzaidi said the exemption for locals was in part due to the feedback the ministry received from the industry’s stakeholders.

“The minister took into account our concerns and made appropriate adjustments to the tax accordingly. Now we can only hope Malaysians take advantage of the situation and go on more frequent domestic holidays,” he said.

MITA has likewise responded in anticipation by increasing its promotion of domestic packages, hotels and activities. Uzaidi urged the public to seize the moment not only during the school holidays but throughout the whole year as well.

 More importantly, he said domestic tourism served to provide support for the economic activities of the surrounding communities and the states which people traveled to.

“Even a banana fritter seller at tourist hotspots benefits when you buy from him. By empowering the local populace domestic tourists also help contribute to sustainable tourism, in line with the World Tourism Organisation’s 2017 theme of International Year of Sustainable Tourism for Development,” he said.

Malaysian Association of Tour and Travel Agents President Datuk Tan Kok Liang said the exemption and a flat rate for foreign tourist across all hotel types and accommodation was a good compromise.

“The exemption for all Malaysians will stabilise domestic tourism as well as a relief for essential travellers on business, medical, religious and educational purposes. Reducing from RM20 to RM10 for 5-star and 4-star hotels will minimise adverse impact on the high-end industry.

“However, we need to review the lower class category accommodation providers and budget hotels as the increase may be between five percent to 30 per cent of their room rate. Long stay budget travellers that are price sensitive may be affected,’’ he said.

If implemented the added fund can be allocated to boost Malaysian tourism more said, Tan.

“With the minimum impact, the extra funds spent on tourism infrastructure development, Malaysia can enhance its ranking as a preferred holiday destination,’’ he said.

However, Tan said the implementation of the tax scheme should be announced quickly by the Royal Malaysian Customs to allay any concerns from stakeholders and preferably implemented on April 1, 2018.              

“We hope the collection and implementation mechanism will be announced by customs soon to ease uncertainty in the market. 

“In terms of the implementation date, April 1, is ideal as it gives time for us to inform our customers abroad and no need for to vary our contract agreement that normally expires on 31 March every year,” he said.