THE departure levy that Putrajaya plans to start collecting in September is making some Sarawak leaders jittery as they ponder its implications on the state.

With news reports claiming the levy on air passengers will replace the tourism tax, leaders, like Tourism, Art, Culture, Youth and Sports Minister Abdul Karim Hamzah, are already counting what the costs.

For one, Sarawak could see the end to some RM3 million in extra revenue annually – that’s the state’s share of the tourism tax.

Sarawak received RM2.58 million – 50% from the tax collected in the state last year.

If Putrajaya replaces the tourism tax with the departure levy, then Sarawak will get absolutely no share of the projected revenue of RM1.1 billion as all are the federal government’s to keep.

With an end to the extra revenue, “all states will suffer”, Karim said.

“There won’t be any provision for a ‘return’ of part of this tax to the states, like the mechanism in tourism tax,” he said.

While the Asajaya assemblyman has his doubt about the reports, he nonetheless said any new tax or levy will pinch consumers’ pocket, whether locals or foreigners.

“I’ve not heard of the proposed departure tax (officially) replacing the tourism tax but I do hear of the government wanting to impose the departure tax on everyone leaving Malaysia.”

Karim said while the levy is good for government coffers, he said those in the tour and travel industry believe the levy could negatively impact the country’s tourism.

“A family of five going for a holiday overseas or within Asean will see the cost of travelling increase substantially.”

The International Air Transport Association (IATA) has expressed disappointment with the passing of the levy and has urged Putrajaya to abandon its implementation.

IATA’s regional vice-president for Asia-Pacific Conrad Clifford had said the levy “has the potential to do more harm than good to the Malaysian economy”.

He said while the intention is to raise revenue for the government in the short run, “it needs to be recognised that aviation is a catalyst for economic growth, and any action that dampens the demand for travel will also hurt the industry’s economic contributions to the country”.

On the impact on the state’s tourism industry, Karim said he doesn’t know how specifically it will do so, but that it could be cushioned as “Sarawak has its own mechanism in building up its tourism industry”.

“We will (wait and) see what the federal government will do.

“I do hope that federal government does not start imposing taxes unnecessarily, which could make the tourism industry in Malaysia less favourable than our Asean neighbours.

“Tourists are smarter now and make comparisons between various packages available among countries.

“And, if Malaysia is less favourable, they will flock to Indonesia, Thailand, Cambodia, Vietnam or the Philippines, where tourism is being promoted aggressively,” he said, echoing the sentiments of the IATA.

The tourism tax came into force on August 2017, and taxed foreign hotel guests RM20 per room per night in a stay in a 5-star hotel; RM10 for 4-star hotels; RM5 for 1 to 3-star hotels; and, RM2.50 per room per night (one, two and three Orchid) as well as unrated hotels. – July 4, 2019.