Hornbill Unleashed

July 19, 2017

‘GST collects billions, so why tourism tax for RM90 million?’

Filed under: Politics — Hornbill Unleashed @ 8:01 AM

Junz-Wong-nazri-aziz-tourism-hotel-checkin-1Parti Warisan Sabah (Warisan) says Tourism and Culture Minister Nazri Aziz’s latest remarks about the tourism tax leave more questions than answers.

Yesterday, Nazri said the tourism tax was meant to plug the deficit in the ministry’s advertising spending budget due to the massive cut in the tourism promotion budget from RM200 million to RM110 million this year.

Nazri also said the depreciation of the ringgit had made promoting Malaysia overseas more expensive.

“Just two years ago, when the ringgit fell to its lowest value in 17 years, Nazri said the depreciation of the ringgit was good for tourism.

“Now he’s blaming the depreciation of the ringgit for the higher cost of promoting tourism overseas,” Warisan vice-president Junz Wong told FMT.

He was referring to Nazri’s controversial remark in 2015 that the depreciation of the ringgit benefitted tourism as it made Malaysia very affordable for foreigners.

“If the depreciation of the ringgit means the government has to pay more for tourism promotion overseas, maybe Nazri should lead the way and cut down on his trips overseas since these too become more costly with the ringgit’s depreciation,” Wong said.

He added it was also “strange” that despite Putrajaya hailing the GST as a “saviour” of the economy, raking in RM59.72 billion as of last November, the ministry still needed to introduce the tourism tax to make up for cuts in the ministry’s advertising budget.

“Nazri said that the ministry’s budget was reduced from RM200 million to RM110 million. That’s a deficit of RM90 million.

“Compared with the billions collected in GST, RM90 million is a small amount. Couldn’t Nazri have requested for more funds rather than impose a new tax? How have the billions in GST been used?”

Wong said he hoped Nazri wasn’t implying that the government didn’t have money as that would be very worrying.

The Likas assemblyman said Nazri should explain why the government needed to introduce a burdensome tax just to make up for RM90 million.

“Nazri said the tourism tax will bring in RM654.62 million if there is a 60% occupancy rate at the 11 million hotel rooms in the country.

“If the cut in the ministry’s advertising budget is only RM90 million, what in the world does it need over RM500 million extra for? How will this extra revenue be spent?”

Referring to Nazri’s previous comments about the tourism tax revenue being divided equally between Peninsular Malaysia, Sabah and Sarawak, Wong asked if this meant Sabah and Sarawak’s respective state tourism ministries will get to decide how their states are promoted.

“Since Sabah and Sarawak have their own tourism ministries, they should be given their share of the tourism tax as they would know best how to promote their states.”

Wong added that Nazri should also respond to a recent China Press report that the ministry allegedly expedited the implementation of the tourism tax in a bid to overcome a RM250 million deficit incurred by the Tourism Board.

Quoting sources, the Chinese daily reported that the Tourism Board had failed to properly plan its expenditures, especially when it came to promoting tourism in countries like China and Japan.

The shortfall in the board’s finances continued for the past two years, the report said.

Likening the board’s spending to “a running tap”, the newspaper reported the federal government was unwilling to cover the RM250 million bill.

“This is a very serious allegation and perhaps the Malaysian Anti-Corruption Commission should look into this. Alternatively, Nazri could make the Tourism Board’s accounts public for everyone to see,” Wong said.

Bad precedent

Meanwhile, PKR’s Wong Chen said the budget cuts faced by the tourism ministry were a symptom of shrinking government revenues due to low oil prices, the sluggish economy and poor dividends from government-linked companies (GLCs).

“The problem is made worse by poor spending priority, corruption, mega projects and bad governance.”

He said although he understood that Nazri was trying to “shore up” his own ministry’s budget with the tourism tax, he could be setting a bad precedent for other ministries.

“What if more ministries decided to follow him and also raise their revenue by imposing some new tax? That would make the revenue stream of the federal government uncoordinated resulting in many unintended policy consequences.”

He added that the tourism tax would affect domestic tourism as well as burden the hotel industry as a whole.

The Kelana Jaya MP said if the government couldn’t raise revenues, it should root out corruption and cut down on “frivolous protocol spending”.

“Taxing the people more will only make things worse.”

The tourism tax was originally slated to come into effect on July 1 but was postponed due to opposition by tourism industry players as well as the Sarawak and Sabah state governments.

The tourism tax will see local and international tourists having to pay a levy to operators of registered accommodation premises.

The tax per room-night for non-rated hotels will be RM2.50, while the tax for two-star hotels will be RM5; three-star, RM10; four-star, RM15; and five-star, RM20.

It was also reported recently that Malaysians may be exempted from paying the tourism tax when they stay in hotels rated three-star and below.

Source : FMT Online by Robin Augustin



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