HOTELIERS are hoping that Budget 2021 will offer incentives to help the sector survive the ravages of the Covid-19 pandemic.

They said the third wave of Covid-19 has hit their businesses and staff hard, hence the need for Putrajaya to reduce the burden on cash flow.

They want the budget to include tax relief and exemptions to help the industry.

Malaysian Association of Hotels (MAH) CEO Yap Lip Seng said the biggest concern is getting banks to delay loan payments.

He said the conditions set by some banks are not conducive and causing businesses to owe more to banks.

“We hope that the government will study and implement an immediate assistance programme for the hotel industry as soon as possible before the industry collapses, otherwise the reconstruction will require more expenditure,” he told The Malaysian Insight.

Hoteliers hope that the government can provide tax relief and concessions, as well as reorganise taxation of the tourism and hotel industries, such as the sales and service tax (SST), tourism tax, digital tax and tourism promotion expenses.

“Looking at Budget 2021 holistically, we urge the government to emphasise its implementation and overall industry enforcement to ensure initiatives and efforts reach the right target groups, especially those badly impacted by the Covid-19 pandemic.

“First, to lower compliance and cost of doing business, the industry is looking forward to more tax reliefs and incentives, there’s no better time to introduce more than now.

“This is alongside reclassification of electricity tariffs for hotels to industry tariffs instead of commercial on top of extending and increasing current utilities discount for tourism premises, as well as restructuring taxes involving the tourism and hotel industry.”

Yap said the industry is burdened with various and multiple levels of taxes, from SST to digital tax, tourism tax, entertainment tax, heritage taxes and fees, tourism promotional fees, local hotel fees and other fees, that are both counter-productive to tourism and are adding a burden to tourists.

Second, Yap said the government must acknowledge that the tourism and hotel industry is still weak and fragile.

He said the industry is also sensitive to situational changes and unable to sustain these shifts on its own.

“Current wage subsidies are insufficient, as of now it is the same amount that is being extended to other industries while tourism was impacted earlier, is impacted more than other industries, and will recover last.

“We have earlier proposed a tiered wage-subsidy system for the tourism industry, at 50% for employees with wages up to RM4,000 and 30% for those between RM4,001 and RM8,000.

“This is a proven model in countries, such as Singapore, Canada, Australia and the UK, which have higher percentage of wage subsidies.”

Third, allocation for enforcement must be prioritised and implementation closely monitored to protect legitimate stakeholders.

“The industry cannot bear anymore leakages from unregulated and illegal activities, such as home-sharing or Airbnb, that do not contribute to the industry, causing millions of ringgit of losses in tax revenues for the government on top of billions of ringgit in revenue losses for the hotel industry.”

He said the industry also wants the government to reintroduce loan moratorium.

“We are in the third wave and businesses and individuals alike are in need of support to ease the burden on cash flow.”

Wage-subsidy extension 

Malaysian Budget Hotels Association (MyBHA) president Emmy Suraya Hussein called on the government to extend the bank loan moratorium for another six months.         

She said hoteliers hope that the government can continue salary subsidies until at least next June.

“We also hope that Tenaga Nasional Bhd and Syabas will continue to provide a 15% discount for at least three months.”

The association also called for exemptions to the six-month house tax, and personal income tax relief of up to RM3,000 to RM5,000 for domestic tourism in 2021.

Budget 2021 will be tabled tomorrow.

Prime Minister Muhyiddin Yassin said earlier the government would step up efforts to combat Covid-19 in the country and allocate more funds in the budget. 

He said the government has spent RM305 billion, of which RM2 billion went to the Health Ministry, while RM400 million has been spent to curb the rising cases in Sabah. – November 5, 2020.