States to receive 50% share of tourism tax
Datuk Seri Mohamed Nazri Abdul Aziz

The funds will be returned to all states for immediate channelling in their tourism activities and promotions, says minister


All states will receive 50% share, or RM5, from every RM10 collected in the tourism tax, than the initial rate of 10%, or RM1, said Tourism and Culture Minister Datuk Seri Mohamed Nazri Abdul Aziz.

“Although previously I have announced the distribution of RM1 for every RM10, now the share of the tourism tax collected from foreigners visiting Malaysia has been increased to RM5 for each state,” Mohamed Nazri told the Dewan Rakyat yesterday.

The initial 10% share rate was previously criticised from certain states such as Sarawak and Penang.

Mohamed Nazri said this in response to a query from Seremban MP Anthony Loke Siew Fook, who asked the government on the collection of tourism tax since its implementation on Sept 1 last year.

The minister also said the funds will be returned to the states every three months for immediate channelling in their tourism activities and promotions.

“This tax deduction will be made fairly, based on the percentage of travel tax excerpts in their respective states.

“Each state can use these provisions to develop their respective tourism sectors — especially for more aggressive promotion of destinations, organising tourism events, human capital development and maintenance of small-scale tourism project projects,” Mohamed Nazri said.

The share was initially set at 33%, whereby states would be entitled for RM3.30 from every foreign visitors, before the Tourism Ministry reduced it further to 10%, shortly before implementing it in September last year.

Mohamed Nazri said the government had raised almost RM40 million in revenue from the tourism tax collected in the first four months of its implementation.

Based on data from the Finance Ministry, he said tourism tax collection from Sept 1, 2017, to Dec 31, 2017, amounted to RM39.97 million.

Kuala Lumpur is the highest contributor with RM16.62 million collected, followed by Sabah and Penang with a collection of RM4.53 million and RM3.8 million respectively.

“The government, through the Customs Department, will now distribute RM5 for every RM10 collected by the states back to them.”

“So based on the collections of each state, Penang, for example, will receive RM1.94 million and Selangor — that has a total collection of RM2.02 million — will take back RM1.01 million,” Mohamed Nazri added.