THE tourism tax will not be implemented in Sarawak on July 1 as discussions on the tax with Putrajaya are still ongoing, said Chief Minister Abang Johari Openg today.

“It’s not yet finalised. Only the methodology is finalised. There are other issues that need to be ironed out,” he said.

One of the issues is “forward (advance) bookings”.

He said the hotels would be reneging on their contracts with guests with advance bookings if they were to now charge the guests tourism tax, which was not in force at the time the bookings were made. It would also lead to disputes, he said.

Abang Johari also said Sarawak will work with Sabah to iron out the kinks in the tax mechanics.

Meanwhile, Abang Johari said Sarawak had agreed to the controversial tourism tax after thrashing out a deal with Putrajaya, in response to accusations that the state had yielded to the federal government.

Abang Johari said one of the compromises reached was that the tax collection would be shared equally among the three territories that make up the Federation of Malaysia – Sarawak, Sabah and the federated states of Malaya .

“Tax and the collection of taxes is a federal matter under the (Federal) Constitution. But tourism is a state matter.

“When I met the prime minister (Najib Razak), I brought up the issue of residual powers and the (tourism tax) conflict with state rights,” said Abang Johari, who met with Najib on June 14.

The chief minister said the compromises were struck during that meeting, which was held to discuss preparations for the now cancelled Pujut by-election.

Najib also agreed to the demand that Sarawak’s share of the tax money go directly to the state government and “not through any federal agencies”.

“We will continue to defend state rights,” Abang Johari said, adding that channels for “in-depth talks” with Putrajaya were now open to prevent repeats of the tourism tax row and potential conflicts with state rights.

Sarawak Tourism Minister Abdul Karim Hamzah’s appeal to the federal government for a deferment on the tax and Putrajaya’s infringement on state rights had triggered a row with federal Tourism and Culture Minister Nazri Aziz.

State DAP chairman Chong Chieng Jen had accused the state government of “giving in to Umno” and making the people “the biggest losers” in the deal it struck with Putrajaya over the tourism tax.

Chong said the people were now subjected to double taxation – the GST and now the tourism tax for hotel accommodation.

His party peer in Sabah, Sri Tanjong assemblyman Chan Foong Hin, on Friday said the about-turn by Sarawak showed “nothing can be achieved under the present ruling government”.

“The lesson we have learnt from the whole tourism tax fiasco is, the only way to fight for state autonomy is through parliamentary reform,” said Chan. – June 25, 2017.