Hope for tax reduction for upgrades in travel vehicle

Kuala Lumpur, 1 October 2019 – The Malaysian Association of Tour and Travel Agents (MATTA) had made presentations to Minister of Finance YB Tuan Lim Guan Eng and top officials from the Ministry of Finance (MOF) and Ministry of International Trade and Industry (MITI) regarding its proposals for Budget 2020.

It is crucial that the government reviews current import and excise duties tax structure as well as import permits to facilitate operators to upgrade tourism vehicles in conjunction with Visit Malaysia (VM) 2020.

MATTA President Datuk Tan Kok Liang says, “Tourists arriving at our airports ought to be transferred to their hotels using the most modern fleet of buses for tour groups, and luxury vans for those travelling with families or friends. We should not be operating the same vehicle models used 30 years ago during the first Visit Malaysia Year in 1990. But this is what passengers will be getting if the authorities do not review existing policies. VM2020 should be the year to showcase to the world that Malaysia is ready with new measures to deliver the most welcoming experience for visitors to our country.”

Tan clarifies “Current policies on import permits, excise and import duties have made luxury tourism vehicles unavailable in this country or their prices too high for tour operators, thus denying tourists from enjoying their comfort and safety. Many of these models include those assembled in non-Asean countries. A list of most suitable models that can raise our tourism transport to that of international standards is being prepared by MATTA for submission to MOF and MITI.”

“We should make concerted efforts to upgrade the quality of tourism vehicles such as using luxury vans to serve the high-end market, and roomy long wheelbase vans for budget tourists so that travellers could enjoy greater comfort and safety they deserve. This will happen when import permits are issued to bring in models that are currently not available locally and exempting import duty to make them affordable to tourism transport operators. For VMY1990, excise duty was exempted for locally assembled cars licensed under limousine taxis, and many Mercedes saloons were licensed and used as tour cars.”

“Other measures should also be taken to ensure all parties work in sync towards the future and not be bogged down by old baggage. As such, prohibitively high motor insurance premiums, a legacy of the old Motor Tariff that was regulated by Bank Negara, must be reduced to a more reasonable level, especially for vehicles licensed under Bas Pesiaran and Kereta Sewa Pandu as changes made after detariffication had been minimal. For example, express and tour buses should not share the same premiums, as the former are running at high speed most of the time, but the latter move about at a leisurely pace.”

“In total, we made a dozen proposals, mainly for inbound and domestic tour companies, that included new tax incentives and extending those about to expire, lowering qualifying criteria to help small and new industry players, and full tax deductions for costs in developing or improving websites to compete in e-commerce now dominated by foreign online travel agents that pay no local taxes.”

“Other incentives proposed were meant to spur development of rural tourism for the benefit of local communities; offer attractive incentives to make Penang and Port Klang as home ports for cruise ships which could create a host of supporting industries; bigger budget for safety and security particularly in the east coast of Sabah; increase allocation for enforcement manpower to curb illegal tour operators; continue the matching grant under Galakan Melancong Malaysia (GAMELAN Malaysia 2019), and finally granting visa free entry particularly to China and India nationals to boost arrivals.”

“These proposals encapsulated the wish lists of travel industry players and granting them will boost our tourism industry. It is crucial for the government to review current policies and remove barriers to upgrade the quality of tourism vehicles to match the many modern 5-star hotels and shopping malls in the country. Pulling out all the stops will certainly help to ensure that Malaysia achieve the target of 30 million foreign tourist arrivals and RM100 billion in tourism receipts for next year”, concluded Tan.