Sabah to seek amicable tax solution with fed govt


The Sabah state government will work with its Sarawak counterpart to realise fair solutions with the federal government and mitigate all related issues pertaining to the Tourism Tax Act 2017.

Sabah Tourism, Environment and Culture Minister Datuk Seri Masidi Manjun told The Malaysian Reserve that Sabah shares the same view with Sarawak that the tax was conceptualised without much consultation with the two state governments.

He said the passing of the Act that included the inception of the tourism tax has created new dynamics and a new challenge on the part of Sabah state government.

“The state government is going to discuss and decide our stand on the tourism Tax Act 2017 in the next Cabinet meeting. Sabah will continue to work with Sarawak to find common grounds in our engagement with the federal government in our endeavour to find fair solutions to the issue.

“The state government of Sarawak also objected to the proposal, which was conveyed to our chief minister (CM) during Datuk Amar Abang Johari Tun Openg’s first visit to Kota Kinabalu as CM,” Masidi added.

Both state governments agreed to work together to initiate a common stand on the proposed tourism tax, before the Bill was passed in April.

According to Masidi, the Sabah state government had objected to the proposal and accordingly informed the relevant authorities at the federal level when it was proposed last year.

While acknowledging the tax as a step to generate income for the government, Masidi said that a proper analysis on cost and interest should be conducted before the tax implementation.

“Many in Sabah would lose out if our tourism industry is negatively impacted by the tourism tax, should it be implemented,” Masidi said.

The July 1 date for the inception of the tax had caught operators and state tourism agencies by surprise.

Analysts have said the tax would affect tourism counters like Genting Bhd, Shangri-La Hotels (M) Bhd and KLCC Property Group Bhd, which operates the Mandarin Oriental Hotel in Kuala Lumpur.

Operators added that the new tax would depress profit and put off travellers.

Meanwhile, Sarawak Tourism, Arts, Culture, Youth and Sports Minister Datuk Abdul Karim Rahman Hamzah had also asked for more dialogues and deferment for the state. Tourism and Culture Minister Datuk Seri Mohamed Nazri Abdul Aziz’s “controversial response” to his request created ripples among many quarters and the ensuing spat resulted in Sarawak withdrawing from the Malaysian Tourism Board (MTB) on Sunday.

Commenting on calls for Sabah to also withdraw its representative from MTB, Masidi said the move by Sarawak had been wrongly interpreted as opting out of the Act.

“Withdrawal from MTB does not equal to opting out of the provisions of the new Act nor does it amount to rejecting it.

“MTB does not decide tourism policies or laws relating to tourism. It is the marketing or promotional arm of the Minis- try of Tourism and Culture,” Masidi said.