Airlines to collect RM1 Mavcom tax from 2018

By P PREM KUMAR / Pic By ISMAIL CHE RUS

Airlines will charge a RM1 levy for all departing passengers from Malaysian airports starting next year as part of the Malaysian Aviation Commission (Mavcom) tax.

Deputy Transport Minister Datuk Ab Aziz Kaprawi told the Dewan Rakyat that the Mavcom regulatory charge will be imposed at a maximum rate of RM1 — including the Goods and Services Tax (GST).

The Malaysian Aviation Commission (Amendment) Bill 2017 is expected to be deliberated further and decided today by lawmakers.

He said Mavcom is expected to raise RM30 million in the first year, as the regulator plans to be financially self-sufficient from 2018.

“It would match Mavcom’s operational cost, which was between RM25 million to RM30 million last year,” he said when winding up the debates for the amendment to the Mavcom Act yesterday.

The government had injected RM90 million to fund Mavcom’s operational expenditure for the first two years since its establishment.

“The regulatory charge is only fair to be imposed to passengers due to the services rendered by Mavcom, that include complaints management and consumer awareness activities which have to be conducted from time to time,” said Ab Aziz.

The RM1 fee for Mavcom would apply to both Malaysians and foreigners leaving the country through the airports.

Under the bill, Mavcom can also impose a maximum financial penalty of RM1 million against an individual for failing to observe its stipulated guidelines.

As for a company that fails to follow the guidelines, a maximum 5% of its annual turnover from the preceding financial year can be imposed.

Besides enhancing Mavcom’s effectiveness, the bill will ensure sufficient financial resources for protecting the rights and interests of consumers, and aviation development.

Under the bill, the commission can administer, allocate and manage air traffic rights for both domestic and international routes.

Mavcom will also be empowered to regulate unfair and arbitrary fees and charges imposed by the aviation service providers.

The commission may impose a maximum of RM200,000 fine for a first-timer who imposes arbitrary fees and charges.

For a repeat violation, one is liable to an amount 10 times the penalty imposed on a first-timer.

Mavcom will also be given the power to issue guidelines, circulars, directives and practice notes.

The amendment is meant to facilitate the implementation of good practice.

Mavcom is an independent body set up on March 1, 2016, to regulate economic and commercial matters relating to civil aviation.