THE International Air Transport Association (IATA) has asked the government to reconsider implementing the Departure Levy Bill 2019 that was passed in the Dewan Rakyat yesterday.

IATA regional vice-president for Asia-Pacific Conrad Clifford said the levy has the potential to do more harm than good to the local economy, such as by dampening the demand for travel.

“The imposition of the levy would also erode Malaysia’s competitiveness as a tourist destination in the region to the detriment of its economy,” he said in a statement today.

He said the levy also contradicts the existing policies on taxation published by the International Civil Aviation Organisation (ICAO).

“As an ICAO Council member, Malaysia should demonstrate leadership in adhering to ICAO’s policies,’ he said.

A departure levy will be enforced on June 1, at the rate of RM20 per passenger departing for Asean countries, and RM40 per passenger for the rest of the world.

IATA forecasts tha the levy will reduce the number of passengers departing Malaysia by air by up to 835,000 per year, decrease the aviation sector’s gross domestic product (GDP) contribution by up to US$419 million (RM1.7 billion) and see a reduction of up to 5,300 jobs.

In 2017, the Malaysian aviation sector employed 450,000 people and contributed US$10.1 billion to the GDP, Clifford said.

“The broader tourism sector accounted for 13.4% of Malaysia’s GDP, which is significantly supported by air transport.”

IATA is a global trade association for airlines, representing over 290 airline members, including Malaysia Airlines, Malindo Air, Singapore Airlines, Silk Air and All Nippon Airways, which combined account for 82%  of total global air traffic. – Bernama, April 11, 2019.