Penang to retain hotel levy after Malaysia’s tourism tax takes effect: Reports

KUALA LUMPUR: The Malaysian state of Penang will continue to impose its hotel levy, despite a new federal government tourism tax coming into effect on Jul 1, according to local media citing the state’s chief minister Lim Guan Eng. 

This would mean that tourists staying in accommodation while in Penang may be subject to two tourism taxes.

Lim said on Wednesday (Jun 14) that the tax was still needed to promote tourism products in the state, according to local reports.

In Penang, those staying in hotels currently have to pay RM3 per room for hotels above four stars and RM2 per room for hotels below three stars.

The federal government tax coming into effect from July will be added to the prices of all types of premises used as accommodation for tourists, such as registered hotels and inns.

Rates start from RM2.50 (US$0.60) a room each night at a non-rated accommodation to RM20 a room each night at a five-star accommodation.

The measure was given the green light after the Tourism Tax Bill 2017 tabled by Tourism and Culture Minister Mohamed Nazri Abdul Aziz in the last session of parliament was approved in a majority vote.

According to Malaysian media, Minister Nazri said that states which have implemented their own tourism charges would be asked to stop the collections when the Tourism Tax comes into effect.

However, Lim said he was “surprised by the statement because there has been no consultation between the ministry and the state on the issue”.

Lim said the Malaysian Association of Hotels’ Penang Chapter has agreed that RM3 was a small amount “but useful”.

He also expressed concern over the money collected from the national tourism tax saying it would affect businesses if the state removed their own tax. He said a percentage of the money collected from the national tourism tax should be given back to the state.

“I believe many will not feel the pinch with RM3 for hotel stays but RM20 is different,” he added, suggesting that the tourism tax be levied only on foreigners.

Penang, Langkawi and Malacca are among the state authorities that have levies for tourist accommodation.