MATTA Welcomes the Move to Reduce GST

KUALA LUMPUR, 18 May 2018: The Malaysian Association of Tour and Travel Agents (MATTA) welcomes the move by the government to have the Goods and Services Tax (GST) rate reduced from 6% to 0% with effect from 1 June 2018.

MATTA President Datuk Tan Kok Liang says, “This indirectly grants a ‘discount’ to the price of local tour and travel, with hopes of boosting the domestic travel industry which is an important contributor to the Malaysian economy.”

“The ‘0% GST’ is bound to promote spending by both locals and tourist especially on Malaysian shopping, food and beverage including tourist attractions, thus potentially increasing the price appeal of Malaysia as a travel destination and encourage more tourist spending.”

“Domestic air tickets between the Peninsular and Sabah and Sarawak will be more affordable with zero-rated GST and will auger well for domestic tourism. MATTA has objected from day one that air travel should be zero-rated as air travel is not a luxury but an essential service for travel between West and East Malaysia.”

“This policy shift will also bring consistency in GST treatment between Designated Areas (Labuan, Langkawi and Tioman) and the rest of Malaysian travel locations.”
“However, it is not entirely clear whether GST needs to be charged for tours sold before 1 June 2018 but with a travel date on or after 1 June 2018.”

“For instance, if a tour package is sold today (prevailing GST is 6%), but the travel date is in June 2018 (‘0% GST’ era), what should be the GST rate for such tour? As tour and travel products are sold every day, clarity is needed as soon as possible.”

“MATTA is seeking clarification from the Royal Malaysian Customs Department (RMCD) on this matter. We hope RMCD will announce swiftly on the transitional issues when GST is zero-rated on 1 June 2018,” concluded Tan.

President MATTA
Term 2017 - 2019