Kuala Lumpur, 17 October 2018 – The Malaysian Association of Tour and Travel Agents (MATTA) is looking forward to the tabling of Budget 2019 by the Minister of Finance, YB Tuan Lim Guan Eng on 2 November 2018.
MATTA has again submitted proposals as in previous years and is hoping that some of the incentives and funding needed to spur the travel industry forward would be granted.
Interim proposed measures which do NOT add burden to the Treasury
MATTA President Datuk Tan Kok Liang said, “We understand from the various recent press releases from the Treasury, the government’s ability to roll out new tax incentives is limited.”
“Accordingly, we propose the government consider focusing on incentives that do not incur any incremental costs to the government, such as: Accelerated Capital Allowances (ACA) for tourism vehicles, website development/upgrades and Information Communication Technology (ICT) / automation tools. These incentives merely concentrate the tax savings to one year instead of being spread over 4-5 years; thus, do not impact overall tax collections.”
“ACA will encourage modernisation of tourism vehicles for attracting more high-spending tourists with safe and comfortable tour vehicles. ACA for ICT equipment, software and apps will enable travel agencies to adopt the latest technology and automation tools for the tourism sector.”
“The government can consider the above proposed incentives as an interim measure which provides some tax benefits without additional burden to the Treasury.
Proposals for consideration in future
“Meanwhile, we also put forward further areas of stimulus / incentives that the government can consider in the future when public finances are at more accommodative levels.”
“Our proposals for future consideration include incentives and tax allowance for essential tourism fundamentals that will bring multiplier effects for the Malaysian tourism industry, such as luxury tourism vehicles, matching grants, cruise development, and duty-free shopping.”
(I) Tour vehicles
“We have sought tax incentives (including Accelerated Capital Allowance) to encourage modernisation of tourism vehicles for attracting more high-spending tourists with safe and comfortable tour vehicles. This includes reducing import duty for luxury tour vehicles, excise duty exemption be extended to all classes of tourism vehicles and lower insurance premiums for tour vehicles.”
(II) Matching grants
“In order for travel agencies to compete effectively, dedicated incentives such as scope of matching grants to the tourism sector and relaxing the qualifying conditions on the tax deduction for cost of developing and improving websites are needed for effective advertising and promotions in the tourism business.”
“Granting incentives and funding to the tourism industry are investments that offer some of the highest returns for the government. Allocating funding of soft loans for domestic tourism sector will allow enhancement of domestic tourism infrastructure by tour operators.”
(III) Homeport / cruise development
“Amongst our wish list for the tourism industry are incentives to develop Malaysian ports such as in Penang to become a ‘home port’ for cruise ships in the region for travel agencies selling cruise packages. Such tax and other fiscal incentives will lure cruise ships to homeport in Malaysia instead of neighbouring countries.”
“This will facilitate cruise ships to dock and allow passengers to board or disembark, and tourist dollars are spent in the country even before the ships set sail. The ‘home port’ status generates opportunities for industries to provide port-related services such as ship handling, docking, engineering, maintenance, supplies, refueling, crew support, security and others.”
(IV) Duty-free shopping zones
“To further enhance Malaysia’s position as a premier holiday and shopping destination, we are also proposing destinations such as Sabah and Sarawak to be designated with duty free zones as tax free shopping is indeed a lucrative component of Malaysia’s tourism industry. The availability of duty free outlets will encourage more tourist arrivals, thus uplifting the domestic socio-economic activities and growth of tourism industry.”
“With support by the new government, MATTA is eager to modernise the country’s tourism industry and generate more foreign exchange for our country”, concluded Tan.
DATUK TAN KOK LIANG
Term 2017 – 2019