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To ensure equal treatment between tourists, the Budget 2021 proposes that the imposition of tourism tax be expanded to accommodation premises reserved through online platform providers with effect from 1 July 2021.

This proposal aims to ensure a level playing field for bookings made directly with the registered accommodation premises operators and via online platform providers.

Under the Budget Package 2021, one-off financial assistance of RM1,000 has been given to 1,063 tour guides (Sabah) amounting to RM1,063,000.

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The tourism tax is imposed on tourists staying at any accommodation premises at a rate of MYR 10 per night.

Malaysian tourists and permanent residents are exempted from the tourism tax.

In practice, the operators are required to register with Customs and collect the tourism tax.

The imposition of tourism tax has been exempted from 1 July 2020 until 30 June 2021 to support economic recovery for the tourism sector affected by COVID-19.

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Expand wage subsidy programme to avoid more job cuts

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Expand wage subsidy programme to avoid more job cuts

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Expand the wage subsidy programme (PSU) to include a wider base of recipients.

Consider revising the programme to 50% subsidy for employees with pay structure below RM4,000 and 30% for those up to RM8,000.

Under the PSU introduced by the government last year, wage subsidy is provided for the tourism sector at a rate of RM600 per month for workers earning RM4,000 and below.

The RM10 billion Prihatin Supplementary Initiative Package (Kita Prihatin), through the RM2.4 billion Wage Subsidy Programme 2.0, which is now extended until DEC 2021.

Channelled RM12.5 billion to fund the wage subsidy programmes (PSU and PSU 2.0), which is expected to benefit more than 330,000 employers and 2.6 million employees nationwide.

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1. resource allocation costs: lost government tax revenue resulting from the tax incentive

2. compliance costs: lead to too much investment in a certain area of the economy and too little investment in other areas of the economy.

3. revenue costs: associated with enforcing the tax incentive and monitoring who is receiving the incentive and ensuring they are properly deserving of the incentive.

4. corruption costs: similar to revenue costs that it relates to people abusing the tax incentive.

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Encourage individuals and businesses to spend money or to save money by reducing the amount of tax that they have to pay.

Positive and negative impacts on an economy

Attract investment to a country

Increased employment

Higher number of capital transfers

Research and technology development

Difficult to estimate the effects of tax incentives, it can raise the overall economic welfare

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Expansion of tourism tax to accommodation premises booked through online platforms

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Expansion of tourism tax to accommodation premises booked through online platforms

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More tax incentives for the tourism industry should be imposed by the government, such as:

Extension on the tax incentives until March of 2022.

80 percent of statutory income from tourism-related businesses such as airlines, hotels, and travel agents is free from income tax until March 2022.

How to improve tourism?

Improve infrastructure for all the tourists destination

Ecological protection for the environment

Promote local tourism with discounted packages and promotions to increase demand

Rethinking flying to domestic destinations

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12 banks participated

Financing amount

Up to RM300k for SMEs

Up to RM75k for microenterprises

Financing rate

Up to 3.5% per annum

Duration for repayment deferment

Minimum 6 months

Duration for financing tenure

Up to 7 years

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Sectors that are eligible for this campaign

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Sectors that are eligible for this campaign

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Two eligible sectors

Core Tourism

Tourism accommodation premises

Travel agencies & Tour operators

Transportation for tourists

Tourism-related sectors

Medical tourism

MICE ecosystem

Money services businesses

Tourism-related retail, recreation and wellness which can justify significant reliance on tourists

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PENJANA Tourism Financing up to RM1 billion

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PENJANA Tourism Financing up to RM1 billion

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Introduced to support SMEs in the tourism industry by

Preserving their capacity and assisting them adjust and remain viable post COVID-19

Some example of adjustment to enhance new business model with

Deploying new practices

Refurbishment to align with SOP

Contactless check-in

Hygiene procedures

Digitalisation

Online payment gateway

Digital presence and marketing

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Topic: "Covid-19: Insights On Malaysian Tax Impact"

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Topic: "Covid-19: Insights On Malaysian Tax Impact"

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Prihatin Supplementary Initiative Package (Kita Prihatin)

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Prihatin Supplementary Initiative Package (Kita Prihatin)

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The short term benefits of tax incentives & tax reliefs for Tourism Industry

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The short term benefits of tax incentives & tax reliefs for Tourism Industry

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Give a boost to tourism businesses to recover from recession affected by the Covid-19 pandemic and MCO.

Jointly restore Malaysia's tourism and culture industry.

Settle insufficient cash flow moment and ease cash flow constraints when business is operated after a long time.

Reduce recent tax cost to be paid by industry players and lower burden in financing.

Mitigate short term business risks.

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Extension of 10% electricity bill discount for 6 affected economic sectors.

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Extension of 10% electricity bill discount for 6 affected economic sectors.

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-Special discount of 10% for electricity bills dated October 2021 to December 2021.
6 economic sectors:

Hotel Operators

Local Airline Offices

Shopping Malls

Convention Centres

Theme Parks

Travel & Tour Agencies

-This would result in cost-saving for businesses and relieve the burden of industry players.

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One-off financial assistance of RM 3,000

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One-off financial assistance of RM 3,000

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Conditions:

licensed tourism agencies under the Tourism, Arts and Culture Ministry (MOTAC)

Tourism and travel agency that have received financial assistance of RM3,000 under the PEMERKASA initiative are automatically eligible for PEMULIH assistance.

New applications are opened to licensed tour operators under MOTAC that have never received financial assistance under the PEMERKASA.

-RM 16 million was allocated in this financial assistance.

-More than 5,300 registered tour operators will be benefit.
-help the tourism agencies to revive their businesses when Malaysia moves to Third Phase of PPN.

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The long term benefits of tax incentives & tax reliefs for Tourism Industry 

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The long term benefits of tax incentives & tax reliefs for Tourism Industry 

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to revive the economy and to ensure the continuity of businesses while retaining the employment of thousands of workers

Ease the financial impact of the Covid-19 pandemic on business

Increase the speed of Malaysia economy and development as well as increase GDP.

the exemptions would encourage local tourists and foreign tourists to visit Malaysia

Have the cash to  keep its operation until this crisis is fully settlement

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Exemption for Tourism Tax and Service Tax for hotel accommodation

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Exemption for Tourism Tax and Service Tax for hotel accommodation

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Tourism Tax

Effective from 1 July 2020 to 31 December 2021,  accommodation operators who are registered under the Tourism Tax Act 2017 are exempted from charging the Tourism Tax to foreign tourists.

Tourism Tax is fixed at RM10 per room per night.

Service Tax

Effective from 1 March 2020 to 31 December 2021, accommodation service providers who are registered under the Service Tax 2018 are exempted from charging Service Tax on the accommodation and other related services.

Service Tax is fixed at 6%.

- this measure help to boost the tourism industry

- the exemptions would encourage local tourists and foreign tourists to visit Malaysia once the Covid-19 pandemic is under control.

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Deferment of tax instalment payments for tourism sector

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Deferment of tax instalment payments for tourism sector

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Companies in the tourism industry will be given a deferment for payment of their monthly tax instalments for the period from 1 April 2021 to 31 December 2021.

the application for deferment must be submitted to the Inland Revenue Board of Malaysia (IRBM).

This measure help to ease the cash flow of the companies in these industries for a period of 9 months.

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Pemerkasa Stimulus Package for tourism industry

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Pemerkasa Stimulus Package for tourism industry

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Tax Incentives & Government Aids for Tourism Industry

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Tax Incentives & Government Aids for Tourism Industry

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National People's Well-Being and Economic Recovery Package (Pemulih)

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National People's Well-Being and Economic Recovery Package (Pemulih)