KUALA LUMPUR – The Malaysian Association of Tour and Travel Agents (Matta) is calling upon the government to act boldly and decisively, through Budget 2021, to bolster the floundering Malaysian tourism industry.
“The tourism industry is fragile and sensitive for 2021 and likely beyond because of the critical impact caused by the Covid-19 pandemic,” said Matta president Tan Kok Liang in a statement today.
“This Budget must provide solid relief programmes and substantial spending to stimulate the economy and livelihood of the people. The Budget 2021 must then be reviewed periodically given the unprecedented global changes taking place around us.”
He said the government has to focus on protecting jobs and businesses through a more effective wage subsidy programme and moratorium extension amongst other relief support.
“The moratorium should be extended until at least June 2021 as the tourism industry has been crippled and is unable to repay loans. Many businesses and individuals will suffer and will probably be declared bankrupt without a moratorium extension,” he added.
He said the government has to make firm decisions and instruct the banks and other finance and leasing companies to extend the moratorium period to help the economy as a whole.
He also criticised the government's current measures rolled out to provide temporary relief such as the Penjana Tourism Financing (PTF) and related facilities, saying they are not effective as prudent SMEs will be cautious about future repayments during this period of uncertainty.
“As for an effective wage subsidy programme, Matta is in agreement with the Malaysian Association of Hotels (MAH) on a proposed two-tiered wage subsidy system which is similar to the system used in Singapore, Canada, Australia and the UK,” he said.
“The tiered system specifically calls on the Government to provide a 50% subsidy for employees earning up to RM4,000 and 30% for those earning between RM4,001 to RM8,000. The wage subsidy programme should also be extended until at least June 2021.”
Tan also asked for sufficient funding for tourism businesses to invest in digitalisation and for the government to support local online platforms instead of relying on foreign platforms.
“As the national tourism association, we ask for a special grant of RM20 million to further enhance the Matta online and e-hailing platforms for the marketplace,” he said.
Furthermore, Tan said the government should incentivise domestic travel through a special personal income tax relief of RM8,000 per person for domestic travel packages purchased through licensed travel agencies or tour operators inclusive of components such as accommodation, ground transportation and tours.
“The effective tax savings for an ordinary Malaysian is only RM1,680 based on average taxpayer bracket of 21%. Cost of air tickets is also claimable and includes travelling for spouse, and children of the taxpayer,” he said.
Tan also said Matta’s budget wish list also includes tax reliefs for businesses and individuals to provide double tax deductions for all costs for employees’ local company trips (tour packages), and reliefs to companies who are willing to send their employees to local MICE (Meetings, Incentives, Conventions, Exhibitions) events.
“We propose measures such as a tax holiday for individuals, sales tax reduction or exemptions to encourage consumer spending and a reduction in the corporate income tax rate particularly for the small and medium enterprises (SMEs)," he added.
“Other reliefs proposed includes granting 100% exemption for import and excise duty, allowing the importing of CBU coaches and higher-end tourism vehicles, extending tax incentives granted for inbound and domestic tour companies to 2023, extending the Human Resources Development Fund (HRDF) levy exemption to December 2020 and a bigger budget for upgrading tourism infrastructure; working capital for promotions and marketing (Matching Grant) and business adjustment post-Covid-19."
Tan also strongly urged the government to gradually reopen international borders in the first quarter of 2021 starting with Asean countries to help sustain the tourism industry, just like many other countries are now doing.
“The timely and responsible easing of travel restrictions will ensure the many benefits that tourism will bring in a sustainable way to the country and contribute to the livelihood of the 3.6 million Malaysians involved in the tourism industry,” he said.
“At this unprecedented time, the government should manage its finances wisely and there should be solid relief programmes and funding to meet the real needs and priorities that benefit the rakyat and the economy as a whole. We look forward to the commitment the government can offer for the tourism industry so that the industry can have access to better opportunities in 2021.” – The Vibes, October 29, 2020
