Malaysia has revealed benefits amounting to RM1.6 billion (US$390
million) for the travel industry under the National Budget 2022 — but
industry leaders are sounding mixed feelings over unmet expectations.
The Malaysian Association of Tour and Travel Agents (MATTA) had
earlier in September sent an urgent plea to Finance Minister, Tengku
Zafrul Abdul Aziz "to provide practical financial assistance" — since
tourism companies are unable to benefit from tax-related incentives.
said that while several proposals raised in 29 October's budget are
good, they were hoping for a more "generous" budget to help a badly
injured industry since March 2020.
Said MATTA president Tan Kok Liang, "We welcome the targeted
assistance to protect the tourism industry staff force through the
extension of the wage subsidy programme while waiting for the gradual
opening of border for international tourists.
"[However], the rest of the budget initiatives fall short of the expectations to rehabilitate and stimulate domestic travel."
The Malaysian Association of Hotels (MAH) agrees.
MAH President N. Subramaniam pointed out that while the industry had
requested, and was given extension on the exemption of tourism tax and
also personal income tax relief for 2022 — MAH's proposed amount was
RM5,000 while MATTA asked for RM8,000.
This means that under the new budget, financial support only amounts
to RM210 tax savings if under the main tax bracket, MATTA's Tan pointed
“There were also no tax incentives for local companies carrying out
incentives’ trips or holidays for their staff within the country to
boost domestic travel."
A general tourism marketing and operational budget was also not
mentioned in the budget.
MATTA’s Tan (left) and Subramaniam from MAH hopes that when more budget details emerge, it would include financing at zero or low interest to help the industry get back on their feet.
Still, the sector still looks forward to an incentive fund of RM60
million encouraging domestic travel, and are waiting for more details of
the RM600 million under the Penjana Tourism Financing and BPMB
Rehabilitation scheme — [which] could be beneficial to stakeholders if
made accessible at low or even zero interest.
This RM600 million would be for tour operators who have experienced
at least a 30% dip in income, and the financing should benefit more than
26,000 employers and 330,000 workers, said the Finance Minister.
Subramaniam also welcomed the various funds for the upkeep and
upgrade of tourism infrastructure; grants and promotional funding to
encourage tourism, arts and culture initiatives; and the exemption of
entertainment tax for operators in the federal territories.
A tax incentive for events has also been included in the budget, with
Tan pointing out that the setting up of the new Business Travellers
Centre in Johor will help improve the business travel segment due to its
proximity to Singapore — a key contributor of foreign tourists’
arrivals to Malaysia.