Hornbill Unleashed

June 16, 2017

Hotel tax row is really over how money is to be spent

Filed under: Politics — Hornbill Unleashed @ 8:02 AM

Soon after the March 2008 general election, newly-minted Tourism Minister Azalina Othman cut ties between the federal-funded Penang Tourism Action Council (Petac) and the state government by cancelling the memorandum of understanding (MoU) signed in 2001.

The federal government also cancelled or diverted funds for tourism growth and to carry out major programmes in the state, such as the International Dragon Boat Festival, Lantern Festival, Penang Bridge Run and World Music Festival.

Although that decision was later rescinded, funds for tourism promotion in Penang had been slashed drastically. Except for Chief Minister Lim Guan Eng and his colleagues, there was hardly a whimper as this audacious action was seen as punishing the state and its people for electing not to return the BN government.

Not wanting to lag behind, Penang decided to go on its own in raising money for tourism purposes. In 2014, it decided to collect its own “hotel tax” to be utilised for “the development and promotion of tourism infrastructures in Penang.” It was a paltry RM3 for four and five-star hotels and RM2 for other places of accommodation.

Until March last year, RM15 million had been collected of which only RM690,000 had been spent. Tourism development committee chairperson Law Heng Kiang told the State Assembly that a committee comprising him, Lim, the state exco for local government, Penang Global Tourism general manager, and hotel representatives was formed to decide how the funds should be utilised.

Let’s digress from the war of words between Petra Jaya and Putrajaya and address the issue of the hotel room tax to be introduced next month. The issue is not the quantum or the manner in which the tax is collected. More importantly, it is how the money will be spent. It is said that the money would be used for the promotion of tourism but there are indications the money would be used elsewhere.

Tourism and Culture Minister Mohamed Nazri Abdul Aziz was reported as saying that the tourism tax would be able to generate an income of about RM654.62 million if there was a 60% occupancy rate at the 11 million rooms nationwide.

This means that the ministry will have more than three times the amount that had been allocated in the annual budget over the past 15 years. In August 2015, the Star Online reported that the national budget for promotions and advertising has been cut by RM50 million, 25% of the RM200 million allocated annually for the past 15 years.

This prompted the then Tourism Malaysia chairperson Wee Choo Keong to appeal to the Finance Ministry to reinstate the full amount. He argued that it is justified because the industry brought in more than RM70 billion annually.

While the figures may justify the spending, there is this perennial problem of financial accountability. It is a Malaysian malaise and specifically, the ministry and Tourism Malaysia do not have good records to boast about.

Naturally, all parties including stakeholders do not want to see a repeat of the fiascos and those of associated agencies which came close to insolvency. Dubious investments in overseas restaurants, taxi services and other ventures wiped out millions in its coffers due to poor planning, lack of insight and knowledge and pitiable business acumen.

Besides, the extravagance and spending by Tourism Malaysia officials on their overseas jaunts are no big secrets. Many a jaw dropped when Parliament was told last year that during her tenure as Tourism Malaysia chairperson for a year, Ng Yen Yen spent a whopping RM396,000 on 14 overseas trips. This included two one-day trips to Singapore which cost the government in excess of RM22,000.

Wanton waste of money

In the good old days, most of the general managers of hotels in the country were expatriates – Austrians, Germans and Swiss nationals, who wanted to appear politically correct. Despite being knowledgeable and observant of somewhat culpable rules or policies, they did little except speak in whispers among themselves so as not to upset the establishment.

These days, local managers who attend international fairs like the World Travel Market in London and the ITB Fair in Berlin no longer want to remain silent when there is wanton waste of money before their eyes. They ask questions but seldom get answers.

No one explains why it is necessary for a posse of officers to travel to such fairs. Wee even made it more difficult with his presence and actions at the Fourth China International Tourism Expo 2016 in Beijing. He allegedly lambasted staff after seeing an AirAsia bunting put up alongside other promotional material at its booth.

Wee also later alleged that the budget airline had “for years” failed to settle its passenger service charge as well as other debts to Malaysia Airports Holdings Berhad.

These negative perceptions of Tourism Malaysia are difficult to erase. They become aggravated when such cosy positions are occupied by retired politicians and who have little knowledge or experience on tourism. But the biggest giveaway in this tax issue, which took everyone by surprise, came from the Minister in the Prime Minister’s Department Wee Ka Siong.

He said that the tax regime would benefit the people especially in terms of infrastructure development, arguing that people should not see it as a burden especially since the charges were insignificant compared with the room rates at hotels.

“The tax is collected as a consolidated fund, which will eventually be used for the tourism sector. The sector is expected to grow and we need more comprehensive and sophisticated infrastructure to accommodate the growing number of tourists.

“When you talk about building bridges and roads, the allocations to develop them are quite significant, which is how the tax collection comes into play,” he was quoted as saying.

So, is this money going for tourism promotion or building of infrastructure? Is it fair to collect money in the name of tourism and be passed on the Works Ministry for building bridges and roads? Where does one draw the line? Similarly, wouldn’t some money be allocated to welfare services so that the beggars are taken off the streets so that the tourists don’t see them?

The possibilities are endless. The government must demonstrate that it is willing to open its books to be scrutinised by not just the auditor-general but all stakeholders.

For a start, would the ministry replicate the Penang template by including representation from the travel and tourism sectors in a committee which decides how the money should be spent? Perhaps then, there will be check and balance and some sense of accountability in the spending of public money which all Malaysians are yearning for.


Source : Malaysiakini by R NADESWARAN
R NADESWARAN is an award-winning veteran journalist who writes on bread and butter issues with one agenda – a better quality of life for all Malaysians irrespective of colour, creed or religion.


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