Dr M steps in to offer review of Malaysia departure tax
Malaysia’s controversial departure tax – due to be implemented on September 1 – is to be reviewed after intervention by Prime Minister Dr Mahathir Mohamad.
Earlier this month, the government announced that all outbound travellers flying from the country would have to pay tax in the form of a departure levy ranging from RM8 (US$2) to RM150 (US$36).
Dr Mahathir said the government would look into the departure tax and would also study the rates of the passenger service charge (PSC), or airport tax, following AirAsia’s move to collect the additional RM23 levied by Malaysia Airports Holdings Bhd (MAHB) under protest.
The prime minister said it would be unfair for an equal charge to be imposed for both normal and low-cost carriers as the two have different fares.
“We are studying the structure of our taxes so that we would be fair to everyone,” he told the media after an official visit to AirAsia’s headquarters.
Dr Mahathir said Putrajaya would take into consideration all matters, including the size of airlines, fares and costs.
The PM’s intervention has been welcomed by the Malaysian Association of Tour and Travel Agents (MATTA), whose president Datuk Tan Kok Liang said, “If departure levy is implemented on September 1, it is expected to have a negative impact on foreign tourist arrivals.
“Why tax foreign tourists twice? They are now being imposed with a tourism tax of RM10 per room night. For the first five months of this year, the arrivals rose by 4.8% when 8.8% is needed to reach the 28.1 million targets for 2019.
“At this rate, we will end up with 26.3 million and lower if departure levy is implemented. If so, we have once again failed to achieve targeted number of tourist arrivals since 2013, for the seventh consecutive year.”
The MATTA president added, “One of the many industry concerns is the increase of airport tax and the rates unreasonably standardised across all airports in the country from January 1, 2018, regardless of their size, service level or class of travel.
“But such practice goes against the grain of fair pricing, which should be the cornerstone of every business or industry.'
(Source : Travel-weekly)