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Departure levy will hurt tourism, says Matta, minister disagrees
Ainaa Aiman and Vinodh Pillai
-December 21, 2018 3:33 PM
Matta says Malaysia’s tourism arrivals dropped by 3% with 25.95 million tourists in 2017, compared to 26.76 million in 2016. (Bernama pic)

PETALING JAYA: Local travel agents have again panned the implementation of a departure levy on all passengers using Malaysian airports from next June onwards.

The Malaysian Association of Tour and Travel Agents (Matta) said the levy was not implemented elsewhere for “obvious reasons”, adding that Malaysia’s tourism industry was “trailing behind” its neighbours.

Matta president Tan Kok Liang said that Thailand recorded a 7.8% increase in tourist arrivals, Singapore, 6.2% and the Philippines, 11%.

On the other hand, he said Malaysia’s tourism arrivals dropped by 3% with 25.95 million tourists in 2017, compared to 26.76 million in 2016.


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Matta president Tan Kok Liang.

“If a departure levy is imposed on all air passengers leaving Malaysia, it may deter tourists from choosing Malaysia as a preferred holiday destination especially to price-sensitive travellers,” Tan told FMT.

“Air passengers are presently paying service charges. If the departure levy proposal is implemented, it will mean travellers will have to pay an additional tax.

“It would be a negative point for tourism on a wider scale especially when measured against the potential ‘earnings’ and the potential ‘loss to the economy’.”

He said a departure levy would not have a “significant impact” on domestic tourism unless travellers have extreme budget constraints, adding that not all air passengers are “tourists”.

Some fly internationally for pilgrimage, education, business and seeking medical treatment, he said.

“The government needs to focus on creating healthier tourism fundamentals to stay competitive,” he said.

Putrajaya in its budget next year proposed a departure levy on all air travellers leaving the country from June 1, 2019, to encourage the development of domestic tourism.

The departure tax of RM20 and RM40 would be on top of the RM73 passenger service charge (PSC) already imposed by airports.

Experts have since cautioned that the departure levy will affect tourism arrivals and a drop in passengers.

The Institute for Democracy and Economic Affairs (IDEAS) warned that the levy would affect Malaysia’s “competitive advantage”, saying this is “7% to 9% more” than taxes collected in Thailand, Singapore and Indonesia.

Tan said the collection of the proposed departure levy was only a “fraction” of what the government could gain from other taxes, such as 6% sales and services tax (SST) and the tourism tax.Tourism and Culture Minister Mohamaddin Ketapi.

Meanwhile, Tourism and Culture Minister Mohamaddin Ketapi said he was optimistic the country could attract more foreign tourists in the coming years.

“Our focus now is to further promote the country’s tourism efforts with new initiatives driven by relevant agencies under the ministry,” he said in a statement to FMT.

He said the government was targetting 30 million tourists with RM100 billion worth of returns by 2020, and called for local industry players to increase the marketability of their packages.

“I am confident that the efforts to promote the Visit Malaysia 2020 plan currently in the works will be able to achieve this”.