Wilson (middle) and SATTA committee members showing the tax invoice issued by AirAsia.
KOTA KINABALU: Travel agents, especially those providing ticketing services, are losing money monthly as they are unable to claim back their input tax paid to the Royal Malaysian Customs Department.
Sabah Association of Tour and Travel Agents (SATTA) chairman, Datuk Seri Winston Liaw, lamented that travel agents in Sabah are on a survival margin because they cannot claim back their input tax as the Customs Department does not accept the BSP/IATA report (Bank Settlement Plan/International Air Transport Association) as the supporting document when making the claim.
“How can we sustain if we have to have to fork out thousands of ringgit every month? Travel agents have already been suffering for the past one and half years due to unfortunate incidents like the MH370 and kidnappings.
“Travel agents have lost at least 40 per cent of their business compared to the previous years. Now we are affected by the GST,” he said, adding that a lot of travel agents are now facing cash flow problem because of this predicament.
Wilson explains that when a customer purchases a ticket, the airline via IATA, bills the travel agent the 6 per cent GST.
“That means we have already paid to the airline. Now, we have to also pay to the Customs Department another 6 per cent monthly but are unable to claim back this input tax as the Customs Department has already rejected the BSP/IATA report as our tax submission,” he stressed.
Wilson said that MATTA had two dialogues with the Customs Department in Kuala Lumpur and proposed the use of BSP/IATA but was rejected. The last meeting was on May 15, and the reason they rejected the proposal is because IATA does not have an official registered office in Malaysia, as its headquarters is in Singapore.
“Why is it that the Internal Revenue Board, when they assess our income, accepts the BSP/IATA report? When we do our accounts, what they refer to is our cost of ticket sales and the BSP/IATA report reflects the cost of our ticket sales.
“So if IRB can use this report, I don’t see why the Customs Department cannot. If the Customs Department can use the report as our tax submission, it will solve a lot of problems. It will simplify all the process and the airlines need not issue us the tax invoice anymore,” he pointed out.
Wilson said that as the proposal had yet to be accepted by the Customs Department, the alternative solution was that the airlines issue tax invoice to the travel agents.
“At this particular moment, the IATA issue is yet to be resolved, so we urge the airlines to issue tax invoice to all the travel agents immediately. We have approached the airlines with our request for them to issue the tax invoice but they are waiting for MAS to act first.
“This is quite ridiculous, if they don’t give us tax invoice, they are also violating the law,” he said, adding that with the tax invoice, travel agents can claim back the 6 per cent GST from the Customs Department.
“Don’t say the 6 per cent is a small amount of money because if your sales volume is RM1 million, that means you have to pay RM60,000 a month and that is a large amount of money,” he stressed.
Wilson lauded low cost carrier AirAsia for being the first to do this for travel agents so that they can claim the input tax from the Customs Department.
MAS, as the national carrier, should also do the same so that other airlines will follow suit, he said, adding that travel agents and airlines must work together in the matter so that both will benefit.
“If the Customs Department can accept the BSP/IATA report, then there will be no need for the airlines to do so. Once MAS does this, I am sure the other airlines will follow suit,” he said, adding that about 5,000 travel agents throughout the country are facing the same problem.