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Malaysia Tourism Tax (TTX) 2023: What You Need to Know

In line with the announcement made by the Malaysian government regarding the Tourism Tax , I will talk about a series of questions that are commonly asked by hotel owners or operators, thus helping all of you to find the answers that are related to it. 

1. What is a Tourism Tax?

Tourism Tax (TTx) is referred to as a tax charged for all foreign passport holders at accommodations premises collected by the operators effective from 1st September 2017 in Malaysia. It is charged at a fixed rate of RM10.00 per room per night.  However, during the Covid-19 pandemic, The Malaysian Government has announced the exemption of the Tourism Tax for all foreign passport holders for hotel stays between 1st March 2020 and 31st December 2021 then further extends to 31st December 2022.  Now, the Malaysian government has announced that the Tourism Tax will resume back starting from 1st January 2023. 

2. How is the RM10 per room per night applied?

Assuming one room is booked for one night by John (who is a Filipino), the TTx charged to John will be RM10.00 x 1 room x 1 night = RM10.00  In the 2nd Scenario, assuming two rooms were booked by Dianne (who is an Indonesian) for three nights, so the TTx charged to Dianne will be RM10.00 x 2  rooms x 3 nights = RM60.00 

3. How is this new to the travel industry starting January 2023?

Since September 2017, a guest who is a foreigner is subject to paying Tourism Tax when staying at any “accommodation premises” in Malaysia; this tax is collected by the operator at the accommodation premises upon check-in, regardless if the booking was made online or walk-in. However, starting from 1st January 2023. For any bookings made through digital platforms that provide reservation services such as booking.com, Agoda, and Expedia, the platform is the one to collect the Tourism Tax directly from the foreign guests when the guest made the booking and payment online through the platform. The digital platform provider shall remit the tax collected to the RMCD. Whereas, for booking that was made online through the platform but payment only upon arrival at the accommodation premises, the TTx shall be collected by the accommodation operator upon guest arrival. The responsibility of remitting the tax collected for this booking shall be by the accommodation operator instead.

We have just received the update that currently, only AGODA will collect the TTx directly from the guest together with the room charges if they made the payment online. Whereas, for other OTAs like Expedia, Booking.com & Traveloka, the TTx will be collected upon check-in by the property operator, UNTIL FURTHER NOTICE. 

4. What if the booking has been made before 1st January 2023 for the check-in date after on or 1st January 2023? 

If a foreign traveller has made a booking on a digital platform before 1st  January 2023, for check-in on or after 1st of January 2023, the Tourism Tax must be collected by the accommodation operator upon guest arrival and the accommodation operator is required to remit the tax to the RMCD.

5. What if my property did not register for TTx? 

We advise you to further consult with your business advisor or check with RMCD if you have not registered as a Tourism Tax registrant. Generally, if you are operating accommodation premises of 5 rooms or more, you are liable to be registered.  You may also check this website https://www.myttx.customs.gov.my/ to further understand the registration. 

6. If a Malaysian with his foreign friend both check into the same room and the booking was made and paid by the Malaysian, is TTx chargeable? 

In this case, it is not subject to Tourism Tax because a local stayed and paid for the stay. However, the Tourism Tax is chargeable in the event that the foreigner stays and pays for the stay.

7. If the reservation has been made with full payment together with the TTx for the booking made via OTAs, then the guest request for the cancellation on a non-refundable policy, will the TTx will be refunded?

Unfortunately, we are unsure of this. Do let us know in the comment section if you have more information regarding this. What I can say is, you may refer to the T&C directly from the OTAs. 

8. Will TTx subject to SST too? 

No. The operator is not allowed to charge SST on the Tourism Tax. 

9.  Is day use chargeable to TTx?

No, if the day use charge is not equal to the room rate per night.

10. Is a Digital Platform provider compulsory to collect private data such as passport no. or ID no. to ensure nationality?

Yes. The Digital Platform provider should make an appropriate adjustment in its system to capture the information that is to identify the citizenship of the tourists.

11. John makes an accommodation booking online and provides inaccurate information which resulted in TTx not being collec ted. Who wi ll be responsible? 

If due diligence has been done to obtain the information required from the tourists, the Digital Platform provider will not be responsible for any inaccurate information provided by the tourist, which may result in the under-collection of TTx. 

Check out this video where we answer a frequently asked question regarding the Tourism Tax

That’s all 11 common questions that we heard so far regarding the Malaysia Tourism Tax. Please share this article if you find it useful and drop any questions in the comment sections if you think there are more questions that should be answered. 

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State to resume collecting hotel room fees in July

Monday, 27 Jun 2022

(From left) Lim, Goh and Yeoh with Malaysia Budget and Business Hotel Association Penang branch chairman Andy Lau after the press conference at Komtar. — ZHAFARAN NASIB/ The Star

WITH the tourism sector back in full swing, the Penang government will resume collecting hotel room fees from July 1.

Depending on the type of hotel they are staying in, guests will have to pay RM2 or RM3 per night.

The state government stopped collecting the fees for two years due to the Covid-19 pandemic.

State tourism and creative economy committee chairman Yeoh Soon Hin said Penang had carried out various initiatives to help tourism industry players during the pandemic, including waiving the fees from July 1, 2020, to June 30, 2022.

“Prior to the pandemic, the state government collected more than RM5mil in hotel room fees every year.

“As Malaysia’s international borders are now open, bringing an influx of tourists into Penang, the time is right to resume collection of the hotel room fees.

“Hoteliers in the state are supportive of the move as well,” he said in a press conference.

Yeoh said the hotel room fee collection was important as a source of revenue, helping the state in the promotion and marketing of tourism activities.

“I do not think tourists will have an issue with it as the fee is the same as before the pandemic,” he said.

Malaysian Association of Hotels Penang chapter chairman Tony Goh, who was at the press conference, said its members were in favour of the move.

“We don’t think the move will burden hotel guests.

“This move is necessary as we can use the money to better promote Penang as the preferred tourism destination worldwide,” he reasoned.

Penang Hoteliers Association chairman Datuk Lim Mee Lee hoped that the money collected would be used to further enhance the state’s tourism sector.

The collection of hotel room fees started in 2014.

Guests paid RM3 per night at hotels rated four stars and above, and RM2 per night at hotels rated three stars and below including dormitories, budget hotels, hostels and boarding houses.

Yeoh also announced a collaboration between IHG Hotels and Resorts (IHG) and Tradewinds Corporation Bhd, a leading hotel owner, to upgrade and reopen the former Penang Mutiara Beach Resort in Teluk Bahang.

“This shows that investors have confidence in Penang despite the pandemic.

“The resort will provide new economic possibilities and generate more jobs,” added Yeoh.

Penang Mutiara Beach Resort was a five-star luxury resort that closed down in 2006.

Goh said the association was excited to see a new international hotel in the state.

It was reported that the resort would be rebranded as InterContinental Penang Resort.

Set to open in 2025, the new luxury resort will feature 355 rooms and suites, a private enclave of six villas and a holistic wellness village with 10 treatment villas and a relaxation pavilion.

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Penang visitors set to face two tourism taxes for hotel stays

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GEORGETOWN — Visitors to Penang will soon be subjected to two tourism taxes — one that will be imposed by the federal government from next month and an existing charge put in place by the state.

Sunbeds lie empty on Ferringhi beach at George town on the Penang resort island in Malaysia. AFP file photo

Chief Minister Lim Guan Eng said the existing charge was still needed to fund the promotional activities for the state.

“The sum collected was used to promote tourism in Penang and it has seen success because the number of tourists have increased drastically,” Mr Lim said yesterday.

Penang currently charges a fee of between RM2 (S$0.65) and RM3 per room night through its local councils.

In addition, the federal government will impose a tourism tax of between RM2.50 and RM20 per room, per day for hotel stays from next month.

East Malaysian states Sabah and Sarawak have opposed the introduction of the tourism tax by the federal government. Sarawak on Monday withdrew its representative from the Malaysian Tourism Board with immediate effect, as the tiff between the Borneo state and Putrajaya over the new tax escalated.

The move followed a sharp exchange of words between Sarawak’s Tourism Minister, Mr Abdul Karim Rahman Hamzah, and his federal counterpart, Mr Nazri Abdul Aziz.

Mr Abdul Karim had urged the federal government to defer the July 1 implementation of the tourism tax for Sarawak and Sabah.

Yesterday, Sabah’s Tourism, Culture and Environment Minister, Mr Masidi Manjun, said in a statement: “Sabah shares the same view with Sarawak that there have been little or no consultations with the state governments of Sabah and Sarawak prior to the enactment of the law on tourism tax.”

He added that the tax will affect Sabah’s tourism industry, which was just recovering from a slump following security breaches in the east coast and an earthquake that hit Mount Kinabalu.

Meanwhile, Mr Nazri, the Tourism and Culture Minister, said states which have implemented their own tourism charges would be asked to stop the collection when the new policy comes into effect. He said this move was to avoid double charges on tourists, which would be counterproductive.

But Mr Lim, Penang’s Chief Minister, has disputed claims that the cessation of existing tourism charges in Penang, Malacca, Langkawi and Kota Bharu was raised when the Bill was debated in Parliament.

Mr Lim said the Tourism Ministry did not convey this to his state administration. “This is something new, I’ve not heard about this, when debating the Bill, I do not recall this being mentioned,” he said, adding that he will wait for an official notice from the Tourism Ministry.

Mr Lim also said that most states are seeking reassurances from the ministry that the money collected from the tourism tax will be channelled back to the respective states.

The new policy announced by the government in April has been criticised by the tourism industry and Malaysians, who are not exempted from paying the tax. AGENCIES

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