Hansard shows no state MP debated on Tourism Tax Bill

KUCHING: No Sarawak MP from both sides of the bench had participated in the debate to express their views on the Tourism Tax Bill when it was tabled by Tourism and Culture Minister Datuk Seri Nazri Abdul Aziz in Parliament in the wee hours for the second and third readings before the Bill was passed without any amendment through voice voting at around 5am on April 5.

According to the Parliamentary Hansard sighted by The Borneo Post yesterday, Nazri started introducing the Bill at 1.39am, which was the last of the six Bills in the order of the day, followed by about three hours of debate and queries from predominantly opposition MPs from Peninsular Malaysia.

Based on the Parliamentary Hansard, the only East Malaysian who participated in the debate was Penampang MP Darell Leiking who, among others, wanted assurances from Nazri that “tax collection would be allocated to Sabah since the state is one of the biggest tourist contributors to the federation… I know homestay will not be taxed.”

“But there are many tourist spots in Sabah, in my area there is also Tagal system where I understood, many tourists from China and from Asia come, you know, to look into and enjoy the facilities,” Darell said.

In his response, Nazri said if possible, the money collected would also be sent to Sabah and Sarawak and therefore, Sabah and Sarawak would not be exempted from the tax.

Besides Darell, the others were Lim Guan Eng (Bagan), Loke Siew Fook (Seremban), Gobind Singh Deo (Puchong), Datuk Mahfuz Omar (Pokok Sena), Ng Wee Aik (Tanjong), Dr Mohd Hatta Md Ramli (Kuala Krai), Khalid Samad (Shah Alam), Manivannan Govindasamy (Kapar), Sim Chee Keong (Bukit Mertajam), Hee Loy Sian (Petaling Jaya Selatan), Sim Tong Him (Kota Melaka), Charles Anthony Santiago (Klang), Tian Chua (Batu) and Ooi Chuan Aun (Jelutong).

When the Bill was tabled at the Senate for the second and third readings on April 27, only two senators debated on the Bill; namely Datuk Abdullah Salleh and Sarawak’s own Dr Zaiedi Suhaili from Barisan Nasional.

Although Dr Zaiedi supported the Bill, he had raised a few crucial points including the necessity of the federal government consulting and negotiating with Sarawak prior to the tabling of the Bill, even though he understood that tourism is under the jurisdiction of the federal government.

“If we cannot resolve it legally, we can always find the best solution, knowing that the state government and federal government always have good working relationship and most particularly our Prime Minister Datuk Seri Najib Tun Razak and our Chief Minister, who is also(former) Sarawak Tourism Minister, Datuk Amar Abang Johari Tun Openg are close.”

He also wanted the ministry to give details on whether the Tourism Tax collected could be shared with the state government although it was listed as Item 25A in the Federal List in the Federal Constitution.

“Taking this opportunity, I also want to state that Sarawak has a view that maybe this Bill is not in line with the spirit of the Federal Constitution that Sarawak perceives, because tourism was not found in the Federal List prior to 1994.

“However, with the amendment to the Constitution in 1994, tourism was listed as Item 25A that is listed under the Federal List. Before 1994, Sarawak is of the opinion that because it was not mentioned, not stated in the Constitution, therefore, this subject is a subject that is on its own. Residual list. Residual power of the state and the Federal.”

In trusting that Nazri understood the situation in Sarawak, Dr Zaiedi had proposed that Sarawak be given permission to impose its own (tourism) taxes since the Act has given the minister the authority to exempt a region to be given permission to collect tax.

“We support the collection of tax but we are requesting that we can implement state sales tax so that we are given the permission to collect this tax through state sales tax or we are given the opportunity to share (the tax collected). This is because if it goes to the Customs (Department), it will go into the Consolidated Fund.

“Therefore, we are requesting for special consideration. This is for the development of the state of Sarawak because our tourism sector is more concentrated on ecotourism and biotourism. Therefore, we need a special attention from the minister.”

Dr Zaiedi had also wanted the Customs Department to give explanation on whether the Tourism Tax will incur additional cost to hotel operators to upgrade their point of sale system (POS) when this tax is implemented since they had to change their POS machine when the Goods and Services Tax (GST) was implemented.

In his response, Nazri said the ministry expected that it would be a problem because it was still uncertain whether tourism is under federal or state jurisdiction.

“To overcome this problem, therefore it is why we table this Bill because in the Constitution when it concerns tax, it is the right of the federal (government).”

He said to prevent the uncertainty, the federal government had decided that the Tourism Tax be tabled because in any country that practises the federal system, when it comes to tax, it is the right of the central government.

“However, I would like to mention here that if until today those states that had imposed their own tax, they can continue to do so.

“We can impose the tax together, state can impose tax, federal also impose tax. But we feel that maybe it would discourage people to stay in (hotel) if the people are taxed too much when federal and state also tax them.”

Nazri said this could be overcome if the state could have an understanding with the Customs Department that the tax imposed by the state government could be absorbed into Tourism Tax.

He also explained that the ones paying for the Tourism Tax are not the hotels or resorts but the customers, whether they are local or foreign tourists, adding that Malaysians going to Thailand and Singapore are also required to pay tourism tax.

Nazri also said that the Tourism Tax will benefit states like Sarawak, who have fewer hotels and resorts, as the money collected from places like Kuala Lumpur that has the most hotels could be allocated to the state for its promotion.

The Tourism Tax Bill was passed by the Senate on the same day after the third reading without any amendment.