The incentives can help industry players return to and stay in tourism sector 

by ANIS HAZIM/ pic MUHD AMIN NAHARUL

THE tourism sector wants the government to provide business and tax incentives to further revive the industry that is still reeling from the Covid-19 pandemic. 

Triways Travel Network (M) Sdn Bhd group MD Mohd Akil Yusof said the incentives could help the industry players to return and stay in the tourism sector. 

“Before the pandemic, there were 3,600 members (tourism businesses) registered with the Malaysian Association of Tour and Travel Agents (Matta), but now there are only 2,200. 

“I hope the government could provide hiring incentives, probably for a year for us to re-boost tour- ism players’ confidence to stay in the industry,” Mohd Akil told The Malaysian Reserve (TMR) recently. 

Since the beginning of the pandemic, many tourism businesses were forced to close as travel restrictions and a series of Movement Control Orders (MCO) were imposed resulting in a critical cash-flow situation. 

Mohd Akil, who is also Matta deputy president, also hoped that the government will extend the tax exemption for inbound tourism players in the upcoming budget. 

“I think the tax exemption should continue for the next two or three years, as our businesses were closed for two years during the pandemic and now, we are trying to recover from those lost years,” he added. 

Under the previous budget, the tourism tax exemption for inbound tourism was extended for a second time until December 2022, which was first introduced in July 2020 until June 2021 under the National Economic Recovery Plan stimulus package. 

Mohd Akil also hoped that the government would offer utility discounts for tourism businesses which were affected during the pandemic as they were still paying bills while not operating in the last two years. 

On tourism transportation, he said Malaysia must ramp up its services to stay competitive with other countries although this comes with a cost. 

“We cannot purchase or upgrade tour vehicles without paying a pretax first and the pretax fee is too expensive for us, so I hope the government can look into this,” he added. 

Meanwhile, Malaysia Tourism Council president Uzaidi Udanis said bus operators need some allocation to restart their operation. 

“We have a lot of buses which are not fully utilised yet and we need some funding to start them up, starting with the road tax and the bus components like tyres, and batteries to start the ball rolling. 

“With the tourism industry just recovering from the lockdowns, there are very few group tours that hire 40-seater buses, many of which have not even had their road tax renewed. A conversion incentive should also be given for normal tour buses to be converted into recreation or luxury vehicles,” TMR was told. 

Uzaidi, who is also the Malaysian Inbound Tourism Association president, said Malaysia should look into exploring recreation vehicles to attract more tourists to the country as Malaysia has a lot of tourist attractions. 

He wished for the government to provide allocation for tourism players to boost more activities and attractions for visitors. 

“We have so many venues but there are not many activities. Some incentives or funding are required to create a lot of activities,” he added. 

Moreover, Uzaidi said the banks should support and assist in terms of loans for the tourism players to strengthen and expand their businesses. 

“Currently, the tourism industry is considered as high risk, which is why the banks are quite reluctant to give us loans,” he added. 

He said a tourism bank can be set up to help expand the industry which does not just involve the provision of hotels and chalets for tourists, as there is also potential in medical, agriculture, youth and education tourism. 

He noted that the government should always keep the tourism industry in the national budget as it is a “low-hanging fruit” for the government to drive the country’s economy. 

“Tourism is one of the fast- est ways for us to boost the economy. If you look at other countries like Thailand and Singapore, they are pushing their tourism sector very high. 

“The government must take swift actions to cushion the negative impact of a possible reduction in take-home pay and consumer spending against the threat of a looming recession. 

“Malaysia needs to attract more foreign tourists in the coming year, as foreign tourists’ arrivals of more than two million as of June 2022 are way below that of 26.1 million in 2019,” he said. 

Meanwhile, Malaysian Association of Hotels (MAH) president Christina Toh was hoping for a lower wage subsidy of 30% for workers with a salary of up to RM4,000 and 15% for those with a salary of up to RM8,000. 

MAH opined that a minimum wage mechanism across the board does not encourage productivity or efficiency, and it also proposed an industry-based wage mechanism which is based on productivity, skills and tasks performed. 

“For reliable supply and demand of tourism-related data, a live on-demand, centralised tourism platform should be set up, to plan for the sustainable growth of the hotel and tourism industry. 

“In terms of tourism industry support as well as integrity and delivery of tourism data, the data should be released promptly, in consultation with the industry. 

“Given the massive upgrading and reinvestment required, tax incentives for tourism and hotels should be extended for all categories up to 2025,” Toh told TMR. 

She added that after suffering losses for two years, MAH is also seeking tourism recovery funding via soft loans that are interest-free or with low interest for reinvestment, upgrading, repair and maintenance of hotel properties, as well as for operating expenses. 

Toh said individual tax relief for travel and hotel expenditure within the country is proposed at RM5,000 per year to drive domestic tourism. 

“Exemption of the sales and service tax for hotels is to be extended till December 2022. The counterproductive tourism tax should be abolished to encourage high yield and long stay international arrivals,” she added. 

She also said to help address Malaysia’s weakness in international business events, a special budget should be allocated to the Malaysia Convention & Exhibition Bureau and Tourism Malaysia to pitch for international events. 

“As the tourism industry invests heavily into international promotions, a special marketing grant for domestic and international marketing activities is proposed for business-to-business and business-to-consumer trade shows,” she said. 

On the other hand, Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri wished for a bigger allocation from the Ministry of Finance in Budget 2023 to promote the country overseas. 

She was quoted as saying that promoting Malaysia overseas is necessary to revitalise the country’s tourism industry. 

“We also hope to get more grants to spur industry growth and allocation for cultural diplomacy with the Foreign Ministry to ensure we achieve our targets,” she said. 

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This article first appeared in The Malaysian Reserve weekly print edition.