The Malaysian Insight

FIRST and business class passengers will pay a higher departure levy soon, as Putrajaya looks at introducing new rates to allow the rich to subsidise the poor in air travel, sources told The Malaysian Insight.

Under the new restructured plan, first and business class passengers will pay a maximum of RM150 in departure levy compared with RM20 for economy class travellers, said sources.

“The new levy, which is expected to be introduced in September, pending cabinet’s approval, has different rates to allow the rich to subsidise the poor,” sources told The Malaysian Insight.

The levy depends on a travellers’ seat and destination, they said.

Those departing for a Southeast Asian destination on a first or business class ticket will be charged RM50 while those in economy class will be charged RM8.

Those travelling to other destinations in first or business class will be charged RM150 while economy travellers will pay RM20.

The Malaysian Insight also learnt that the levy will be included in ticket fares, with airlines collecting the charge on the government’s behalf when a ticket is purchased.

Finance Minister Lim Guan Eng said on November 2 last year that the levy would be implemented on June 1, with passengers departing to Southeast Asian countries being charged RM20, and RM40 for other countries.

However, the source said the government had a rethink of the rates so those travelling in first and business class can alleviate the burden of economy passengers.

This is also because most passengers travel in economy class.

Furthermore, the source added, those travelling to countries beyond Southeast Asia are likely able to afford the extra tax.

The Finance Ministry tabled the Departure Levy Bill in April but did not specify the charges. However, the bill stated that the finance minister has the authority to gazette the amount levied.

The law also includes punitive provisions against those who do not pay the levy. Those convicted are liable to a maximum fine of RM500,000, or a jail term of three years, or both.

Businesses guilty of not paying departure levies will be liable to a fine of up to RM1 million or a maximum jail term of five years, or both.

Under Sections 38 (3) and 38 (4) of the bill, those found forging tax receipts, reporting falsely, or attempting to deceive over payments of the levy are liable to a maximum RM100,000 fine or a year’s imprisonment, or both.

The source also said the levy is not applicable to children below the age of two, aircraft crew members, private flights and transfer flights. 

The levy is also not applicable to land and sea transport. – May 16, 2019.