HotelsMalaysian hoteliers call for personal tax relief and incentives to stem losses

Personal tax relief for locals staying in hotel? Why not

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Yap MAH CEO was happy that the government was receptive to some of the proposals set out by MAH to tide over the current economic situation.
Yap MAH CEO was happy that the government was receptive to some of the proposals set out by MAH to tide over the current economic situation.

KUALA LUMPUR – The Malaysian Association of Hotels (MAH) has proposed a series of novel measures that it hopes the government will offer to travel businesses impacted by the coronavirus.

...the industry is also seeking a reduction in the rate of the tourism tax from RM10 (US$2.40) to RM1 per room per night to boost international tourist arrivals, along with personal income tax relief of up to RM1,000 per person for Malaysians staying in hotels registered with the tourism ministry, both until the end of this year.– MAH chief executive officer, Mr Yap Lip Seng

MAH were among key stakeholders affected by the current economic situation caused by the spread of the 2019‐nCov novel coronavirus, that met with Mr Lim Guan Eng, Finance Minister and Datuk Mohamaddin Ketapi, Minister of Tourism, Arts and Culture. The meeting was called by the Finance Ministry in preparation of Government stimulus package for the tourism industry.

MAH said the government ministers who were “receptive to our ideas, particularly on easing industry stakeholders’ cash flow constraints”.

MAH chief executive officer, Mr Yap Lip Seng, added, “The ministers openly expressed willingness to consider the temporary suspension of certain mandatory contributions by tourism employers, as well as to introduce a personal tax relief for individual Malaysians.”

Yap said the industry is also seeking a reduction in the rate of the tourism tax from RM10 (US$2.40) to RM1 per room per night to boost international tourist arrivals, along with personal income tax relief of up to RM1,000 per person for Malaysians staying in hotels registered with the tourism ministry, both until the end of this year.

MAH is also asking for a temporary exemption on service tax for hotels for this year. Additionally, they are seeking for the Government’s intervention to instruct a 10% discount on water bills and a 15% discount for electricity charges, for hotels starting February for a duration of six months.

Yap added that among other requests, they hoped for an industry tariff instead of the standard commercial tariff, for the suspension of employers’ contribution to the Employees Provident Fund and the Minimum Wage Order 2020 exemption for a period of three months respectively.

Industry stakeholders were particularly elated when Bank Negara expressed positivity for commercial banks and financial institutions to restructure and reschedule loans or hire purchase contracts for the tourism industry. It was recorded that commercial banks within their own jurisdiction are able to offer moratorium from three to six months to its customers.

Mr Kamaruddin Baharin, MAH president, revealed that there has been a total of 95,972 room cancellations due to the coronavirus, resulting in a loss of revenue of over RM40 million (US$9.6 million) up till Feb 9. Most of the cancellations were up till end of February with the majority coming from China, while also including some cancellations from Malaysians, Singapore, Taiwan, Vietnam, South Korea and few other countries.

Based on a MAH survey, slightly more than 60% of the cancellations were received by hotels who had about 20% of their regular occupancy coming from China.

The cancellations when looked at from market segment saw MICE bookings contributing only 9.75% of the cancellations, the highest were online travel agency bookings from consumers at 22.5% followed by travel agency tour group bookings at 17.5%, FIT direct bookings at 17% and OTA (B2B) at 16.5%.

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