Budget Allocation Too Low To Help Us, Says Tourism Industry

PETALING JAYA: The allocation for the tourism sector under Budget 2023 is underwhelming as the sum is hardly enough to support industry players who are still recovering from the effects of the pandemic.

The revamped Budget 2023, which was announced by Prime Minister Anwar Ibrahim yesterday, allocated RM250 million for tourism.
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The Malaysian Association of Tour and Travel Agents (Matta) president Tan Kok Liang said the funds were insufficient given that the government was promoting Malaysia as a leading travel destination.

“Funding for Visit Malaysia 2014 was RM358 million, back when the exchange rate was RM3.3 to US$1 compared with the current RM4.43.
Tan Kok Liang.

“What this simply means is that costs have gone up significantly and a bigger budget is needed,” he said in a statement.

“It’s also crucial to cushion the gap between now and 2025. To sustain tourism operations we hope that further stimuli will be introduced along the way so that industry stakeholders can effectively do their part to meet our national tourism targets.”

Anwar, who is also finance minister, announced that 2025 would be “Visit Malaysia Year” with a target of 23.5 million international tourist arrivals and a projected income of RM76.8 billion.

Malaysian Association of Hotels (MAH) president Christina Toh was thankful for the allocation but said that it was not strategic in addressing the issues currently plaguing the tourism industry.

“We hope that the government can look at the bigger picture, where the tourism industry was once one of Malaysia’s top three revenue generators.

“We are a long supply chain that encourages the economy of Malaysia, from fast-moving consumer goods (FMCG) to transport and logistics,” Toh told FMT

She said had the budget been more favourable to the tourism industry, it would have had a greater positive trickle-down effect to peripheral industries.

Toh also said she hoped the government would consider implementing tax allowances for hotel refurbishments and renovations, as many industry players were in need of funds after two years of being shuttered.

Meanwhile, Malaysian Budget and Business Hotel Association (MyBHA) president Sri Ganesh Michiel was also grateful for the allocation but outlined several points he hoped the government would consider implementing to aid the industry’s recovery.

“We regret that Budget 2023 cannot have a positive long-term effect on the recovery efforts of the hotel industry, and there is a need for special improvements to the budget for the hotel and tourism Industry,” Ganesh said in a statement.

To assist the industry, Ganesh said the government should introduce measures that are more effective in resolving tax losses and revenue leakages that stem from the absence of laws that regulate short-term residential accommodations (STRA) and online travel agencies (OTA).

“We are also disappointed when there is no change in efforts to raise the annual threshold value of service tax (SST) for the hotel industry from RM500,000 to RM1.5 million,” he said.

Ganesh said the government should strive to introduce a better, friendlier, and more effective budget for the hotel and tourism industry in general, to ensure its recovery.