Tourism tax issue resolved, says DPM


The disagreement between the federal government and Sabah and Sarawak state governments on the Tourism Tax Bill 2017 has been resolved, Deputy Prime Minister (DPM) Datuk Seri Dr Ahmad Zahid Hamidi said.

According to Ahmad Zahid, the matter was discussed at a Cabinet meeting chaired by PM Datuk Seri Mohd Najib Razak on Wednesday.

“We have decided that the matter is resolved and there should be no more statements from federal and state leaders.

“Personally, I had met both chief ministers from Sabah and Sarawak. That chapter is closed, so let’s open a new one,” Ahmad Zahid told reporters in Putrajaya yesterday.

Sarawak Tourism, Arts, Culture, Youth and Sports Minister Datuk Abdul Karim Rahman Hamzah had earlier requested the federal government to defer the enforcement of the tourism tax in the spirit of the Malaysia Agreement 1963.

Abdul Karim said the state government must have some say in the matter, and have a share of the tax collected.

Sabah Tourism, Environment and Culture Minister Datuk Seri Masidi Manjun echoed Abdul Karim’s stance that any tax imposed should be channelled directly to the state’s coffers and not via the federal government.

Nonetheless, Ahmad Zahid maintained that the tax will still be implemented on July 1, as announced by the government previously.

“The tourism promotion requires funds, and we found that there are states that have lower collections, while others have more,” he said.

Ahmad Zahid added that the tax collected will be used to promote touristic products, and not by states.

Prior to this, Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan said the tax, which will be collected by hotel operators, would be used directly by the Tourism Ministry.