Nazri asked to explain tourism tax

KUCHING: Minister of Tourism and Culture Datuk Seri Nazri Aziz has been asked to explain the mechanism of the tourism tax to the Sarawak and Sabah state governments.

Minister of Tourism, Arts, Culture, Youth and Sports Datuk Abdul Karim Rahman Hamzah said the state governments of East Malaysia deserve an explanation from him.

"Is it so difficult for Nazri to go to Sabah and Sarawak and explain the mechanism of how this tourism tax is to be shared? He is most welcome to visit Sarawak to do it," he told The Borneo Post yesterday.

Abdul Karim said by right Nazri should explain to the two state governments, or at least to their chief ministers, why Sarawak and Sabah are being treated like other states when it comes to the division of tourism tax proceeds.

He stressed that Sarawak and Sabah have cause for concern because tourism is not on the Federal or State List under the Malaysia Agreement 1963.

Thus, he said tourism should be treated as on the Residual List – matters deemed to come under the state.

"It was only in 1994 that tourism suddenly appeared in the Ninth Schedule of the Federal Constitution, which treated it as a federal matter but this insertion in 1994 had never been referred to or gotten the endorsement of the two state governments, which led to Sarawak treating it as a matter which the federal government had taken away from the state," Abdul Karim said in response to Nazri's call for the governments of Sarawak and Sabah to speak directly to him on any misgivings about the distribution of the tourism tax.

According to Nazri, he has yet to be approached by either state government although their remarks have been reported.

Last month, Nazri said his ministry planned to return RM1 for every RM10 in tax per room per night collected to state governments for the purpose of promoting tourism.

This was despite his previous statement saying that revenue from the tax would be shared equally between Sarawak, Sabah and Peninsular Malaysia.

Despite calls by the Sarawak and Sabah governments for the implementation of the tourism tax to be deferred, Nazri said it would be enforced from Sept 1.

Malaysians and permanent residents will be exempted, while foreign tourists will be charged a flat rate of RM10 per room per night for all hotel classifications.

Nazri said Malaysia is projected to collect about RM210 million in tourism tax revenue annually.