Finance Ministry proposes departure levy exemption for pilgrims, children under two years old

KUALA LUMPUR, April 10 — Deputy Finance Minister Datuk Amiruddin Hamzah today said that his ministry will propose to exempt pilgrims and babies below 24 months old from the proposed departure levy.

In his winding-up speech today, Amiruddin said that despite the broad wording of the proposed law which currently imposes departure levy on all cross-border transportation, the finance minister still has the discretion to provide exemptions.

Amiruddin added there were also suggestions that foreign travellers transiting in Malaysian airports be exempted from the levy.

“I want to say that among the exemptions that would be proposed to be given, is also for any passengers transiting in our airport.

“No matter how long they transit, and then they can continue their travels.

“Babies who are below 24 months, we will also suggest to be exempted from this departure levy,” he added.

Earlier, Amiruddin was pressed by Opposition members on the definition in the Departure Levy Bill, which they pointed out as being too broad in detailing who would be imposed with the new tax.

According to Clause 9(1)(a) in the Bill, anyone leaving Malaysia “by any operator” shall be subjected to the departure levy.

The Bill also defines operators as “any person who operates any vehicle to carry any person leaving Malaysia”.

This could mean train services, cruise ships and chartered vehicles crossing the border may be subject to the charge.

The Bill did not detail the exact levy rate, though the Pakatan Harapan (PH) government introduced the departure levy in Budget 2019, proposing to charge RM20 for those departing for Asean nations and RM40 for other countries.

Ayer Hitam MP Datuk Seri Dr Wee Ka Siong who was the leading critic of the Bill, asked that it be withdrawn and amended to explain that only flight passengers travelling overseas would have to pay the charge.

This was after Aminuddin’s continued insistence that only flight travellers bound overseas would have to pay the proposed charge despite the definition provided in the Bill reflecting otherwise.

Amiruddin, however, continued to insist that the amendments to exempt certain travellers can be made later, adding that the finance minister would also have to table the matter to the Cabinet, and bring it back to the Dewan Rakyat.

Despite the details in the Bill, Finance Minister Lim Guan Eng had also previously insisted that only air travellers leaving the country will be charged the departure levy.

Lim said the tax amount will only be decided at a later period as the government is putting the infrastructure in place first.

As for those performing the Haj or umrah pilgrimage, Lim said they can enjoy a one-time exemption from the departure levy, but subsequent travels may be subjected to the tax.

He said the rate will also be announced at a later date after the Haj period, this year, which will be on August 9.