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Fewer Tax Goodies seen for Tourism
Next week's budget is expected to deliver fewer tax goodies and incentives to players in the tourism industry, composed of airlines, hotels and travel and tour agencies, according to economists.
An economist said the Government's stimulus package last year played a huge role in supporting the industry that was hit by the SARS outbreak. We've seen a major recovery in the industry and tourist levels are back to pre-SARS. I don't think major concessions will be forthcoming, he said. However, the economist said the Government might take some fine-tuning measures like undertaking more intensive roadshows and promotional campaigns to make Malaysia a more attractive tourist destination, thereby benefiting the overall industry.
Nevertheless, industry players are hopeful that more goodies would be dished out in Budget 2005 since tourism is an important growth engine for the country. Malaysia Association of Tour and Travel Agents president Tunku Iskandar Tunku Abdullah said the Government had supported the travel and tour industry, especially in times of crisis, and he hoped the authorities would continue to do so.
Undeniably, we have benefited; more so in recent times. Besides financial assistance, there are still other issues in the travel and tour sector that the Government could oversee, he said. For instance, Tunku Iskandar said, the authorities could possibly look into the implication of the reduction in the number of travel agents, especially in remote areas.
He also said that while the tourist levels had bounced back, especially in the inbound segment, the Government could look at ways to attract the higher income group of travellers via some form of incentive or promotion. We have tourists from everywhere. Recently, the Chinese have been coming here by the masses, but they are mainly from the lower income group. The higher income group with better buying power goes to Australia. We need to offer something different to attract them here, Tunku Iskandar said.
The Malaysian Association of Hotel Owners (MAHO), meanwhile, hopes the Government will extend the unlimited reinvestment tax allowance, currently enjoyed by the manufacturing sector, to hotel operators in Budget 2005. Its president Amir Abdul Rahman said that unlike the manufacturing players that enjoy an unlimited amount of reinvestment tax allowances, hotel owners were only entitled to the allowance once, and applicable only after five years of operations.
In this industry, we need to make changes to remain globally competitive and attract tourists, he said. Amir also said that hotel owners had urged the Government to review the utility charges. Currently, our hotels come under commercial rates but we would like to be charged under industrial rates, he said.
He argued that hotel owners incurred heavy maintenance and utility costs because most hotels operated 24 hours a day, unlike department stores and shopping complexes which had fixed business hours. The Malaysian Association of Hotels vice-president Ivo. R. Nekvapil, who concurred with Amir, said the Government should also allow hotels greater flexibility in employing foreign workers.
AirAsia chief financial officer Raja Mohd Azmi Raja Razali, however, said the no-frills airline was not hoping for any hand-outs from the Government in this budget. We have always survived on our own, he said. But the Government could help promote more local travel, especially to places like Sabah and Sarawak, by standardising jet fuel cost in Peninsular Malaysia and east Malaysia, he added. We would be better able to promote local tourism with the Government's support, he said
Malaysia
