Sabah hoteliers concerned over ramifications of Tourism Tax Bill
KOTA KINABALU: The Sabah Hotel Association has expressed its concern over the recently passed Tourism Tax Bill 2017, fearing that it would deter tourists from visiting the country instead of generating additional revenue.
Association president Christopher Chan said that an additional payable sum might result in decreased tourist arrivals as opposed to expanding the tourism industry.
“There is no guarantee that the implementation of this tax will boost tourist arrivals. There are so many neighbouring countries for them to visit, so it does not make sense in business terms,” he said.
Addressing the association’s concern during a press conference yesterday, Chan added that as of 2016, Tourism Malaysia reported 26.8 million tourist arrivals nationally, which contributed RM82.1 billion to the country’s revenue.
“This translates to RM3,068 per capita spending, meaning that the moment a single tourist arrives in Malaysia, that sum is guaranteed. With the implementation of this tax, we are concerned that tourists might not want to come to our country at all, and we lose RM3,068 just like that.
“The tax doesn’t give us added revenue. If a guest is not happy with it, we get nothing,” said Chan.
He was also skeptical of the implementation mechanism, as he said it would cause a major inconvenience to hoteliers.
“Implementing this tax would bring forth a lot of implications on the hotel industry, especially in terms of cost.
“Asking our guests to pay an additional tax is normally out of our jurisdiction, which means that we will have to set up a separate collection point that is not included in our accounting system.
“Under the circumstances, a different set of staff would have to be employed to do this work with a new accounting software, stationery and other paraphernalia which has nothing to do with the hotel.
“The cost of setting up this function will amount to an excess of roughly RM68,000 on each hotel annually,” Chan lamented.
He broke it down to hiring four staff specifically for the task with each staff member receiving RM1,200 minimum wage, which totals to RM4,800 a month and a whopping RM57,600 a year.
Added with Employees’ Provident Fund (EPF) and Social Security Organisation (SOCSO) contributions at RM8,640 and RM2,306 respectively, each hotel would have to foot a bill of RM68,546 per year if the tax is enforced.
“With over 500 hotels in Sabah alone, these calculations would mean that around RM34 million will be spent a year to operate this system.
“I don’t think it is efficient at all because it is very costly, what more for accommodation providers like backpackers’ lodges or hostels,” Chan explained.
He added that it was also unfair to impose the tax on locals who travel within the country.
“I don’t believe we can afford to see any drop in tourist arrivals due to the imposition of the tax, as tour operators might lose out to other tourist destinations in ASEAN as a result of higher cost in our tour packages.
“A drop in one percent alone in tourist arrival will see a loss of RM7.25 million that goes with the RM435,000 Goods and Services Tax (GST).
“We hope the State Government will look into this matter seriously as we are very dependent on tourism as our main source of income,” he said.