IT is not an unusual tax or cess in the tourism industry. Penang and Malacca both have what they call a heritage tax that is imposed on those who use hotels.

But the new Malaysian tourism tax of between RM2.50 and RM20, depending on the class of hotel rooms, has turned from a purely industry issue to one that reopens up the division between Putrajaya and the Borneo states of Sabah and Sarawak.

It has also shown up the legislative process in Malaysia that allows such tax to be enacted, debated and passed without much fuss from the ruling Barisan Nasional (BN) coalition only to become an issue later.

At stake is one of the main drivers of the Malaysian economy, which contributed RM82.1 billion to 2016 revenues against RM69.1 billion in 2015, on the back of 26.8 million tourist arrivals last year compared with 25.7 million in 2015.

Total receipts in shopping was up in 2016 with RM26 billion compared with RM21.6 billion in 2015, an increase of 20.3%. The average length of stay of a tourist increased 0.4% in 2016 to 5.9 nights.

Putrajaya expects to get RM114 billion from 31 million tourists in 2017, saying revenue from the tax will go towards the tourism industry.

But there are some questions left to be answered following the open differences over the tax by industry players and ministers.

1. The bill facilitating the tax was approved by the cabinet this year. Didn’t any minister from Sabah and Sarawak raise any objection during their meetings or did it slip through unnoticed? Was it even discussed in any of the cabinet meetings? Can the relevant ministers explain?

2. The order paper for the bill was sent to all MPs, including the BN MPs who are the majority in the Dewan Rakyat. Didn’t any of the Sabah and Sarawak BN MPs, who are in the majority, check or read the proposed tax? Did they raise it with those in the cabinet or their respective state government?

3. The bill was pushed through Parliament earlier this year when it was finally approved on April 5 when the Dewan Rakyat finished its sitting at 5am. No BN MPs debated the bill or any of its content related to the tourism tax. What happened? How could they have approved the bill over objections from the opposition and only now make some noise?

4. Tourism and Culture Minister Nazri Abdul Aziz said 75% of the tax revenues is expected to come from hotels in the peninsula as there are fewer top hotels in Sabah and Sarawak. But the revenues will be aggregated fairly. How? Will the revenue be kept separate from the Consolidated Fund? Who will manage the revenue?

5. Does the expected RM114 billion from the tourism industry in 2017 also include revenues from the tax or is it separate? What is the tourism budget for Malaysia and will industry players, state governments have a say on how the money is spent?

6. Malaysia’s tourist promotion has suffered cutbacks in Budget 2017. Will this tax make up for the loss? Are there any other tax proposals beyond just hotels? 

7. Why introduce a tourism tax when there is already the goods and services tax (GST)? Will the tourism tax revenues also need to be paid every quarterly? Who collects the money? – June 13, 2017.