Sabah hoteliers worried about tourism tax implementation

Sun rising over Danum Valley in Sabah. — Photo credit WWF-Malaysia/Lee Shan Kee

 

KOTA KINABALU: Tourism industry players from the accommodation sector here are very worried about the implementation of the Tourism Tax 2017 and its implications on them.

Sabah Hotel Association president Christopher Chan said that the problems that will come up as a result of the new tax law are very real and cannot be ignored.

Chan, when contacted today, stressed that if the implementation of the law is imminent, then the government must allow time for the industry players to prepare and inform their clients.

“We seek a year’s deferment because the rates quoted to our clients are valid for a year,” he said adding that some hotels in Sabah are already experiencing cancellation of bookings when the clients were informed of the new tax.

“We appeal to the government to defer the implementation due to the legal impact it would have on hoteliers as rates quoted to their clients are valid for a year and cannot be changed until March 31, 2018.

“The other issue is that cancellation is already happening when clients are notified of the additional tax that will be imposed. Should our hotels be sued by our clients for loss of business, and who is going to indemnify us? We cannot absorb the tax daily on room sales either,” he stressed.

According to Chan, hoteliers would also have additional expenses as they will need to reprogramme accounting systems and train personnel on the new tax system.

“The hotels will have to engage their IT specialists to reprogramme the accounting system to enable it to add in the tourism tax element. It will cost thousands of Ringgit per hotel not to mention the training cost to be undertaken for the staff. On top of that we will have to pay the six per cent goods and services tax (GST) too,” he lamented.

Then there is the matter of unlicensed room and board providers, Chan said, and pointed out that the demand for these illegally operated accommodations will definitely increase because people do not want to pay the additional tax.

He added that SHA, Malaysian Association of Hotels (MAH) Sabah Chapter, Malaysian Budget Hotels Association (MyBHA), Sabah Backpackers Association, Sabah Tourist Association and the representation from the Sabah Budget Hotel Association recently paid a courtesy call on the Ministry of Tourism, Culture and Environment’s Permanent Secretary Datu Rosmadi Datu Sulai.

During the meeting, they updated and presented him with their concerns on the implications the proposed implementation of the Tourism Tax will have on the tourism industry, he said.

“We hope that these issues and (other) minor ones to be resolved with the ministry before implementation, through meetings and dialogue with the Customs Department. The Sabah state government can discuss these issues before making a final decision on the matter,” he stressed.

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