The Malaysian Association of Tour and Travel Agents (MATTA) applauds Minister of Finance, YB Tuan Lim Guan Eng for granting certain of its wish list in giving due recognition to the tourism industry to generate wealth for the country as provided for in Budget 2019.

MATTA President Datuk Tan Kok Liang said “MATTA is grateful with the matching grant allocation of RM100 million to be provided to private companies for international tourism promotion and marketing to increase tourist arrivals to the country. This is the first time such allocation has been granted for the tourism industry and we look forward for its mechanics and conditions.”

The matching grant allocation will be beneficial for local tour agencies especially SMEs who are constantly active with overseas promotions with MATTA through sales missions to China, India, ASEAN countries and Europe.

It is certainly a right move to set requirement for foreign online booking engines to register with the Royal Malaysian Customs Department (RMCD) and charge Service Tax on imported online services. Imposing Service Tax on foreign online booking engines and withholding tax on commissions paid to them will level the tourism industry playing ground.

The allocation of RM500 million through SME Bank will strengthen rural tourism development such as upgrading the ecosystem for homestays; encourage more rural people to be involved in community based tourism; offer better facilities at recreational and tourism centres such as public toilets; and commercialising ecotourism products ranging from local wildlife to native cultures, arts and handicrafts.

“On our wishlist, MATTA had envisioned Penang becoming a ‘homeport’ whichwould be a boon for Penang’s cruise tourism and generate other economic multipliers. We are very glad that the government plans to provide duty-free shops at Penang’s Swettenham Pier as this is a first step towards realising this item on our wishlist.”

“On the Tourism Tax, we hope that there will be no overlapping of duties to ensure maximise returns of the funds. Usage of the funds should be directed and driven by the Ministry of Tourism, Arts and Culture to ensure that the national tourism objectives are met. Whilst the State Tourism is to focus on tourism products and attractions making it unique and spectacular.”

The target of 30 million tourist arrivals for Visit Malaysia Year (VMY) 2020 is crucial and in need of urgent attention; and international promotion campaigns must be executed in a concerted manner. As such the Tourism Tax funds need to be accorded and apportioned on a need to need basis.

However, the Budget 2019 has left out incentives for local travel agencies keeping in tandem with the digital economy. MATTA had proposed for incentives that do not incur any incremental costs to the government, such as Accelerated Capital Allowances (ACA) for tourism website development/upgrades and Information Communication Technology (ICT)/automation tools.

“Nonetheless, we are grateful to our Government for granting major items in MATTA wish list namely tourism SME funds and digital service tax on foreign booking engines. We will forward new proposals for the next budget to meet fresh challenges ahead”, concluded Tan.


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