Revised tax split gives Malaysian state governments more tourism funds

Half of the tourism tax imposed will go to the state where it is collected; parade participants

at the 4th Usunan Festival competition in Kota Belud, Sabah, Malaysia pictured

Malaysian tourism and culture minister Mohamed Nazri Abdul Aziz has announced that the tourism tax will be split 50:50 between the federal and state governments, rather than 90:10, a welcome move for the Malaysian Association of Tour and Travel Agents (MATTA).

This means that state governments are to receive RM5 (US$1.30) for every RM10 collected in the tourism tax.

This is a sharp contrast to the initial share of 33 per cent, or RM3.30 for every RM10 collected, before the tourism ministry reduced it further to 10 per cent, the percentage used when the tax was implemented.

MATTA president, Tan Kok Liang, said: “It is certainly a right move in empowering the states to be more involved with tourism, which brings immense opportunities and economic benefits to its people.

“The additional funds would allow the states to showcase areas in their own backyards they know best. Each district can develop a strong ecosystem to attract and ensure visitors enjoy their stay so that they will want to come back for more and recommend to others,” he remarked.

This will enable state tourism organisations to be “more aggressive in overseas promotions”, Tan stated, as the funds could be invested into tourism infrastructure development and digital marketing such as destination apps that provide information and on-the-spot bookings.

“A portion of the extra fund should be allocated for human capital development to train frontliners to provide better customer service, including learning to communicate in basic foreign languages,” he added.

Nazri had said the funds will be channelled to the states every quarter for their tourism promotions and activities. The government had raised almost RM40 million in revenue from the tourism tax collected in the first four months of its implementation.

-TTG Asia.