Tourists to pay up to $6.50 tax for a night's stay in Malaysia

Malaysia has announced that it will start imposing a tax on tourists or anyone booking a hotel stay in the country from August on its customs department website.

The tax rates range from RM2.50 (S$0.80) for an 'unrated' room to RM20 (S$6.50) for a five-star hotel room per night. It will apply to all stayers regardless of their nationality or travel purpose, be it a holiday, business, a seminar or a sport or religious event.

According to the Royal Malaysian Customs Department website, the tax rates are:

1. Five-star: RM20

2. Four-star: RM10

3. One to three-star: RM5

4. Unrated and other budget categories: RM2.50

Home-stays registered with the government will be exempted from tax. Also exempted are premises providing accommodation with fewer than 10 rooms and rooms maintained by religious institutions, governments and statutory bodies for non-commercial purposes.

A few months ago, Tourism and Culture Minister Mohamed Nazri Abdul Aziz had said the new tourist tax can raise up to RM654 million if the occupancy rate hits 60-per cent mark for the 11 million "room nights" available in the country.

The Tourism Tax bill was passed with majority assent in Parliament on April 6. But hotel operators were concerned that higher room charges might drive tourists away.

The Malaysian Association of Hotel Owners (MAHO), a grouping of hotel owners, had said the new taxes would add to the woes of operators struggling to cope with the Goods and Services Tax (GST) introduced two years ago. It also wanted local tourists to be exempted from the tax.

The tax will not only affect domestic tourists, but will be an extra burden for Malaysians who have to travel for other purposes such as studies, medical treatments and family obligations, the president of Malaysian Association of Tour & Travel Agents (Matta) president told The Star on June 7.

Datuk Hamzah Rahmat said domestic travel is currently picking up due to the high cost of overseas travel. So he is concerned that an additional tax will deter Malaysians from travelling within the country.