The Malaysian Insight

IT has been decided.

The departure levy, replacing the tourism tax, will come into effect on September 1, meaning tourists will no longer be taxed twice.

A Putrajaya source said the decision was made and details finalised at a cabinet meeting on Wednesday.

The levy, to be imposed on passengers flying from Malaysia to other countries, is calculated based on seat type and destination, said the source.

For example, it will be RM50 for first- and business-class ticket holders on flights to Asean countries, and only RM8 for economy-class passengers.

For those headed to other countries, the levy is RM150 for first- and business-class travellers, and RM20 for those in economy class.

The source said haj pilgrims get a one-time exemption, while children below 2 years old, flight crew, and passengers on private and transit flights are not subjected to the levy.

The Finance Ministry will collect the levy via airlines, which will include the amount in the final airfare.

The ministry said the government collected RM135.5 million in tourism tax last year, and expects to rake in 10 times the amount with the levy.

Malaysia sees an estimated 30 million air passenger departures annually, with 13 million headed to Asean nations.

Industry players told The Malaysian Insight that it is not the right economic climate to introduce such a levy.

They said industries worldwide are investing in green technology, and the levy will only add to their burden.

The levy might also negatively impact arrivals for Visit Malaysia Year 2020, they said.

They added that tourists to Malaysia are already “sufficiently taxed”, including via the tourism tax introduced in 2017 that requires visitors to pay RM10 per room for each night’s stay.

With the departure levy in place, the tax will be done away with. – June 2, 2019.