Associations that support tourism have urged the government to raise the annual Sales and Services Tax (SST) threshold for the hospitality sector from RM500,000 to RM1.5 million by Budget 2024.
According to Dr. Sri Ganesh Michiel, president of the Malaysian Budget and Business Hotel Association (MYBHA), this is required to protect the long-term viability of low-cost hotel owners who face competition from unregistered lodging providers.
“With SST, the price of a room will rise to RM106 from RM100 due to the 6% tax rate. The tax that clients must pay grows along with the accommodation rate.
Even if the room rates these budget hotels offer are comparable to those of unlicensed operators, he said in a statement to Bernama that the SST has made them more expensive and has stopped drawing in clients.
Customers, particularly those in the B40 group, will be able to enjoy reasonable room rates without feeling burdened by the SST tax levied by authorised hotel operators, according to Sri Ganesh, if the threshold value is raised to RM1.5 million.
In order to ensure the long-term viability of the hotel sector, the secretary-general of the Malaysia Tourism Federation (MTF) also hoped that the government will quickly enforce the Short-Term Residential Accommodation (STRA) standards.
He claims that unlicensed enterprises, where the parties involved are not required by law to pay taxes like SST, Tourism Tax, and the set tourism or hotel fees, have cost the government tax income.
The national STRA rules, which are now being created, will, according to a statement from Airbnb’s Head of Public Policy for Southeast Asia, India, Hong Kong, and Taiwan, Mich Goh, represent Malaysia’s dynamism in embracing technology and innovation in the tourism industry.
“Airbnb calls for some key initiatives that are currently allocated to traditional tourism stakeholders to also be extended to STRA hosts, whether individuals or small and medium enterprises (SMEs),” she said.
In order to lessen reliance on foreign labour, the president of the Malaysian tourist Agency Association (MATA), Datuk Dr. Mohd Khalid Harun, hoped the government might allot a specific amount for training additional local personnel in the tourist industry.
He underlined that in order to promote the distinctiveness of Malaysian culture, the local labour functioned as the front line and was essential.
Mohd Khalid added that in order to keep infrastructure in the best possible shape, Budget 2024 should also allocate a specific amount for maintaining and improving it, including airport facilities, public transportation, and other fundamental facilities.
In an effort to draw more visitors to Malaysia, he added, “We are also proposing that the government provide additional funding for the local Islamic tourism sector.”
