THE federal government’s “flip-flop” on the controversial tourism tax shows that it was a “rushed job with little thought going into it” , Sarawak’s tourism, arts, culture, youth and sports minister said last night.

Sarawak Tourism Minister Karim Rahman Hamzah welcomed the news that Malaysians would be exempt from the tax, saying that it was what Sarawak had argued for all the this while.

He was commenting last night on Tourism and Culture Minister Nazri Aziz’s announcement in Parliament yesterday on another change in the tax policy.

Responding to a question from Seremban MP Anthony Loke (DAP), Nazri told him Malaysians would not need to pay the tax as it would only apply to foreign tourists and these tourists would now be charged a flat rate of RM10 per night, per room for all types of hotels and accommodation.

Prior to yesterday’s announcement, the rates were RM20 for five-star accommodation, RM10 for four-star accommodation, RM5 for one- to three-star accommodation and RM2.50 for non-rated accommodation. 

“Any announcement that Malaysians don’t have to pay tax is good,” Karim said.

“It is something that we (Sarawak) are against. This is what we have been saying all this while and had fought for. Malaysians (staying in hotels) are not tourists.

 “Its good news for Malaysians who are already burdened by the GST (goods services tax),” he said after chairing the main organising committee meeting on the International Summit On Peace that will be held here in September.

Karim said he hoped “this is a final decision”.

On the amount charged on foreigners per night per room in all types of hotels or accommodations, Karim said the RM10 is “pittance” to them it would not have a adverse effect on the tourism industry.

Karim in June had voiced Sarawak’s unhappiness on the manner Putrajaya bulldozed the tax into law without consultation with the state and called for it’s implementation to be deferred. That sparked a row with Nazri, which dragged in other members of the state and federal governments.

Nazri had called Karim a political green horn and a “gangster” who should just shut up. 

Karim then said that even though taxation was a federal power, consultation was still the decent thing to do as tourism was a state matter yet the state government could not collect a federally imposed tax.

The failure to consult, Karim said, tantamount to be “against the spirit of the Malaysia Agreement” as it eroded state-federal relations.

Sarawak only agreed to the tax after the federal government agreed the revenue from the levy would only be shared three ways among Sarawak, Sabah and Putrajaya.

When asked if Sarawak would still push for the deferment of the collection date, Karim said the collection was not done by the state but by the Customs Department and it was up to them to state if they are ready or not.

Nazri said yesterday the Attorney-General Chambers and the Customs Department were sorting out the last technical details of the tax collection system and Prime Minister Najib Razak was scheduled to make the announcement soon.

Collection of the tax is scheduled for August 1, and it will be regulated by the Finance Ministry and Customs Department. – July 27, 2017.