Malaysia Alarmed After Tax Deters Chinese Tourists

Malaysia’s tourism department expressed concern over the reported cancellation of trips by 3,000 Chinese travelers to Malaysia due to a new tax the country is planning to impose on tourists.

Citing a piece in Borneo Post, Newshark.com reported that Datuk Abdul Karim Rahman Hamzah, Malaysia’s minister of tourism, said the loss of potential revenue from the cancellations is a cause for concern.

“This is what Malaysian Association of Hotels has informed me too and the reason why I wanted to have the enforcement date deferred and not to rush through the tourism tax. I will hold on temporarily,” Abdul Karim was quoted as saying.

He was referring to the statement made by Malaysian Association of Convention and Exhibition Organizers and Suppliers’ acting vice president, Gracie Geikie, which indicated that Chinese tourists decided to cancel their plans because the tourism tax they will be required to pay would amount to RM100,000 ($23,300).

According to Abdul Karim, he is seeking the deferment of tourism tax until it has been carefully reviewed.

 “It is not to oppose the tax but we want consultation as it affects the state as well as tourism players in the state,” he added.

“We know for sure that the tourism tax is being imposed in many countries in the world, but rushing through the tax implementation can have some adverse effects.”

The new Tourism Tax, which was supposed to take effect beginning on July 1, will be under the direct supervision of the Ministry of Finance and the Royal Malaysian Customs Department.

Upon implementation, proceeds of the new tax will reportedly be used to further enhance and develop Malaysia’s tourism industry.