With the tourism sector still struggling to recover from the Covid-19 pandemic fallout, the Malaysian Association of Tour and Travel Agents has urged the government to provide more subsidies and aid.
Describing the sector as being the first to be hit by the pandemic and the last to recover, the association’s president Tan Kok Liang said many businesses had incurred taxable losses over the past two years.
He suggested another wage subsidy programme to help businesses to cope with the newly introduced minimum wage of RM1,500.
“How will operators of budget accommodations, tour agencies or lodges in the interior afford the RM1,500 when the international borders of a key market like China are still closed?” he said, suggesting the government provide a monthly subsidy for each employee.
Given that international travel was still low compared to the pre-pandemic days, Tan also called for tax incentives to be given to Malaysians travelling domestically.
“(Besides) providing tax relief only for medical and education (expenses), the government can consider a personal tax relief for hotel packages, tours and flights,” he said.
While there were initiatives throughout the pandemic aimed at helping the tourism sector, Tan noted that most of them were tax deferments. “But when there is no income, what is there to tax?” he said.
“So for the 2023 budget, the (government) should be looking at more subsidies and funding for tour operators, hotels and other tourism-related businesses.”
The Malaysian Budget and Business Hotel Association urged the government to implement suggestions that have already been submitted by industry players, particularly on regulating online travel agents and short-term residential accommodation.
The association’s president, Sri Ganesh Michiel, said the continued operation of unregulated short-term accommodation was a threat to hotels and the hospitality industry.
“The government has also lost a lot of tax revenue due to these unlicensed businesses as they are not required by law to pay the sales and service tax, tourism tax or any fees imposed by state governments,” he said.
On control of online travel agents, Ganesh said hoteliers had suffered incurring losses and reduced income in matching prices offered by the agents.
The government was also directly affected as reduced room rates led to reduced service tax collection.
“If the government fails to implement the demands of industry players, there will be no recovery for the tourism industry as businesses will be unable to sustain themselves,” Ganesh said.
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