Tourism tax collections must be returned to the state or divided according to the contribution of the state, say Sabah’s hospitality industry players, today.  

Sabah Backpackers Association president Richie Lee said Sabah should be collecting its own taxes.

“Any new tax would certainly hurt those of us who cater to the budget traveller. But a tax is should either be collected by the state itself, or divided accordingly,” he told The Malaysian Insight. 

Lee said the new tax would further raise the cost of doing business in Sabah, saying that as a businessman he would now have to pay three categories of tax – Tourism, Income and Company.  

He said such a situation would encourage tourists to opt instead for illegal lodge operators who used platforms like AirBnB to sell their rooms.

Matta president Hamzah Rahmat said it would be not be fair to the states that contribute more to tourism if the revenue from the tax  were to be divided equally among all.

“If Sabah is contributing more than the other states, shouldn’t Sabah get a larger slice of the collection?” he said.

The tax is chargeable on a per room per night basis, at the rate of RM20 for five-star accomodation, RM10 (four-star), RM5 (one-, two- and three-star), RM2.50 (one, two and three Orchid) and RM2.50 (non-rated). The tax will be collected by the Customs Department. 

Johor businessman Colin Pitchay said he will seek cheaper accommodation the next time he visits Sabah. 

“No way. No. I will book look for cheaper rates from now on.” he said. 

Australian Anthony Dumapias, 39, is contemplating whether to visit Malaysia again, especially when there are many other countries in  Southeast Asia region with more to offer. 

“I’m not even bothered; if they going to charge taxes, I can go to Phuket, Thailand,” said Dumapias, adding that he wouldn’t mind the extra charge if it was for a good reason.

Culture and Tourism Minister Nazri Abdul Aziz has stated that 70% of the revenue from the tourism tax will be divided equally between West and East Malaysian states and the Peninsular Malaysia. 

In response, Sabah Tourism, Culture and Environment Minister Masidi Manjun said although Sabah collected a record RM7.5 billion in tourism receipts 2016, those in the industry were operating on a slim margin of profit. 

He said that any new form of tax would hurt their businesses.

The hotel and lodge associations will be briefed on the tourism tax at  the Sabah Motac office on June 13. – June 7, 2017.