No date yet for tourism tax enforcement – Masidi

THE Royal Malaysian Customs Department has yet to receive orders to set a date for the enforcement of the tourism tax, said Tourism, Culture and Environment Minister Datuk Seri Panglima Masidi Manjun.

Following a meeting between the tourism ministries of Sabah and Sarawak here on July 4, Masidi said a memorandum on the Tourism Tax Act 2017 detailing the matters which the Federal Government should take note of has been submitted by the chief ministers of both states.

One of the issues raised in the memorandum was to defer the implementation of the tourism tax to March 31 next year if the Act was to be enforced, he said.

“The contract tenure for tour operators is renewed in March every year. If the tax is implemented before March next year, tour operators will be forced to pay the tourism tax, which is an extra cost for them.

“To date, there is no order to enforce the tourism tax yet, but if there is, it should be implemented after March 31, 2018,” he said at the State Legislative Assembly sitting when replying to Dr Edwin Bosi’s (DAP-Kapayan) question on the State Government’s stand on the Tourism Tax Act.

Another issue included in the memorandum was on the distribution of revenue collected from the tourism tax, he said.

Masidi pointed out that Tourism and Culture Minister Datuk Seri Mohamed Nazri Abdul Aziz once said that the tourism tax revenue would be divided into three parts and allocated to Sabah, Sarawak and West Malaysia.

“We still hold on (to that) and hope that the promise will be realized. That is a common stand of Sabah and Sarawak.

“If there is a need to compromise, we have to negotiate, rather than simply saying RM1 from every RM10 (go towards the states). That is not fair for Sabah.

“We will do our level best to ensure Sabah and Sarawak do not lose out if the tourism tax is implemented.”

Masidi said Sabah and Sarawak were special as both states have their own tourism boards.

“We need more financial resources for our promotional costs,” he said.

In addition, Masidi said the Sabah and Sarawak governments have also urged the Federal Government to return the power on tourism administration to the state governments in the memorandum, when replying to Bosi’s inquiry.

In his supplementary question, Datuk Dr Jeffrey Kitingan (Star-Bingkor) asked Masidi if the State Government could delay the enforcement of the tourism tax until a fair solution was reached.

Jeffrey questioned the grounds for the imposition of the tourism tax by the Federal Government as tourism was a residual power vested with the State Government prior to 1994 before it was taken by the Federal Government.

He suggested the State Government set up a select committee to study Sabah rights and strategize on safeguarding the interests of the State in the State Legislative Assembly as a preventive measure.

To that, Masidi said the issue had been discussed in the cabinet and included as one of the matters that should be returned to the State Government, in terms of the tourism sector.

“There is really no need for us to relook at it. We just want to get back the power.”

Earlier, Masidi said the Tourism Tax Bill was passed in the Dewan Rakyat on April 5 and in the Dewan Negara on April 27.

“I am given to understand that the Customs Department has yet to receive any orders to set the enforcement date (for the tourism tax) to date.”

He said the State Government was concerned about the implications of the tourism tax, not only on the State’s tourism sector, but also on the revenue of Sabah.

Masidi said he had raised this issue in the first meeting of the National Tourism and Culture Development Committee on September 1 last year where he opposed to the proposal to impose the tourism tax.

He said the tourism tax issue was also discussed in the Cabinet in September last year.

“The State Cabinet disagreed with the proposal (on tourism tax) from the Federal Tourism and Culture Ministry. Our objection has been conveyed to the Federal Government.”

Masidi said the State Government’s stand on tourism tax was very obvious from the beginning.

“We oppose to the proposed tax and we have been quite consistent on it.”

However, he said the Act had been tabled and passed in the Parliament in September last year.

As such, Masidi said he was tasked by the State Cabinet to discuss this matter with the Sarawakian counterparts, followed by the meeting between the tourism ministries of both states in Kota Kinabalu on July 4.

On another note, he said there was almost none or lack of discussion between the Federal Government and state governments before the Act was tabled.

“I have raised that in the first meeting last September when the proposal was made. I said the (federal) ministry should discuss with the state governments, but they did not do so.

“Not only Sabah and Sarawak, I think other states are also disappointed that their inputs were not sought in relation to the Act,” he said in response to an additional question by Datuk Seri Panglima Lajim Ukin (Harapan-Klias) on whether the Federal Government discussed with the Sabah and Sarawak state governments before the Act was tabled.

Nazri has recently announced that Malaysians would be exempted from the tourism tax, while foreign tourists would be charged a flat rate of RM10 per night and per room for all types of hotels and accommodation.

He also said his ministry planned to return RM1 for every RM10 in tax per room per night collected to the state governments for the purpose of promoting tourism.

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