Malaysia hotels start collecting tax from foreigners

Malaysia is applying a tourism tax on foreign visitors and some 5000 hotels around the country started collecting it at the weekend.

Foreign tourists must pay a flat rate of MYR 10 (AUD 3.38) per night per room, while local tourists and permanent residents are exempt.

Malaysian Association of Hotels (MAH) President Sam Cheah Swee Hee confirmed to the Singapore Straits Times that Malaysian hotel operators had started to collect of tourism tax on Saturday (1 September 2018).

Malaysia’s Customs and Excise Department is “taking a friendly approach” to encourage hotels and lodging operators to register for the new tax, Director-General Datuk Seri Subromaniam Tholasy said.

So far, about 5000 accommodation providers have registered, out of an estimated 10,000 establishments.

Hoteliers must display the newly introduced Tourism Tax rate separately from the room rates.

Malaysia-based Bookingee.com advised clients on Friday: “Following the announcement of the introduction of Sales and Services Tax (SST), the Royal Malaysian Customs Department has recently announced the implementation framework of SST.

“Under the new SST law, Hotels are one of the taxable services which will attract a service tax at approximately 6%. This tax will be additional cost charged directly to the guest upon arrival and check in. Please note this is applied to all hotels in Malaysia from 1 September 2018.

“As a result, we urge you to notify your guest that they will be responsible for payment of the new Sales and Service Tax directly with the hotel upon arrival and is not included in the room rate and we are not authorized to collect on behalf of the hotel.

“All the new bookings created post 30 August 2018 will already have the said tax included in the room rate.”

Written by Peter Needham