MATTA calls for sufficient funding for tourism businesses to digitalise in upcoming Budget 2021

The Malaysian Association of Tour and Travel Agents (MATTA) is urging Putrajaya for sufficient funding for tourism businesses to invest in digitalisation and for the government to support local online platforms instead of relying on foreign platforms in the upcoming Budget 2021 session.

“As the national tourism association, we ask for a special grant of RM20 million to further enhance the MATTA online platform and e-hailing platform for the marketplace,” said MATTA President Tan Kok Liang.

“The Government should further incentivise domestic travel through a special personal income tax relief of RM8,000 per person for domestic travel packages purchased through licensed travel agencies or tour operators inclusive of components such as accommodation, ground transportation and tours. The effective tax savings for an ordinary Malaysian is only RM1,680 based on average taxpayer bracket of 21%. Cost of air tickets is also claimable and includes travelling for spouse, and children of the taxpayer,” he said in a statement.

MATTA’s Budget wishlist includes tax reliefs for businesses and individuals, to provide double tax deductions for all costs for employees’ local company trips (tour packages), and reliefs to companies who are willing to send their employees to local MICE (Meetings, Incentives, Conventions, Exhibitions) events. The Association believes these will encourage companies to retain and reskill their employees during this difficult period.

“We propose measures such as a tax holiday for individuals, sales tax reduction or exemptions to encourage consumer spending and a reduction in the corporate income tax rate particularly for the small and medium enterprises (SMEs). These tax reliefs have also been proposed by other associations and economists, and we fully support it; the reliefs are essential to provide businesses and individuals with more money to be used within the economy.”

Other reliefs proposed include granting 100 percent exemption for import and excise duty, allowing the importing of CBU coaches and higher-end tourism vehicles, extending tax incentives granted for inbound and domestic tour companies to 2023, extending the Human Resources Development Fund (HRDF) levy exemption to December 2020 and a bigger budget for upgrading tourism infrastructure; working capital for promotions and marketing (Matching Grant) and business adjustment post Covid-19.

In 2019, Malaysia received 26.1 million foreign tourists with a revenue of RM89.4 billion exceeding the exports of palm oil at RM70 billion and rubber gloves at RM22 billion.

Inbound tourism is one of the country’s most lucrative exports and with restrictions on travel in place, these exports and foreign revenues have disappeared, affecting the tourism sub sectors value chain especially SMEs.

Tourism exports have a much higher impact on the domestic economy than overall exports. For every dollar of tourism exports, 89 cents of domestic value-add is generated.

“Given the limitations of domestic tourism, we strongly urge the Government to gradually reopen our international borders in Q1 2021 starting with ASEAN countries to help sustain our tourism industry, just like many other countries are now doing. The timely and responsible easing of travel restrictions will ensure the many benefits that tourism will bring in a sustainable way to the country and contribute to the livelihood of the 3.6 million Malaysians involved in the tourism industry,” said Tan.

“At this unprecedented time, the Government should manage its finances wisely and there should be solid relief programmes and funding to meet the real needs and priorities that benefit the rakyat and the economy as a whole. We look forward to the commitment the Government can offer for the tourism industry so that the industry can have access to better opportunities in 2021”,” he added.

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