Selangor Journal
Tourists are seen visiting attraction spots in George Town, Penang, on April 1, 2022. — Picture by BERNAMA

Budget 2024: Hospitality industry players call for SST threshold increase

KUALA LUMPUR, Oct 1 — Tourism-related associations have expressed hope for the government to increase the Sales and Services Tax (SST) annual threshold for the hospitality industry from RM500,000 to RM1.5 million through Budget 2024.

Malaysian Budget and Business Hotel Association (MYBHA) president Sri Ganesh Michiel said this is necessary to ensure the sustainability of budget hotel operators affected by competition from unlicensed accommodation providers.

“With SST, if the room price is RM100, it will increase to RM106 due to the six per cent tax rate. If the room rate is higher, then the tax that customers have to pay also increases.

“Even though the room rates offered by these budget hotels are similar to that of unlicensed operators, they become more expensive due to SST and no longer attract customers to book,” he told Bernama.

If the threshold value is raised to RM1.5 million, customers, especially those in the B40 group, can enjoy affordable room rates without feeling burdened by the SST tax imposed by licenced hotel operators.

Sri Ganesh, who is also the Malaysia Tourism Federation (MTF) secretary-general, hopes the government will immediately enforce the Short-Term Residential Accommodation (STRA) guidelines to ensure the sustainability of the hotel industry.

He added the government has lost tax revenue due to unlicensed businesses where the parties involved are not bound by legal regulations to pay taxes such as SST, Tourism Tax, and the set tourism or hotel fees.

Meanwhile, in a statement, Airbnb’s Head of Public Policy for Southeast Asia, India, Hong Kong and Taiwan Mich Goh, said the national STRA guidelines currently being developed will reflect Malaysia’s dynamism in embracing technology and innovation in the tourism sector.

“Airbnb calls for some key initiatives currently allocated to traditional tourism stakeholders also to be extended to STRA hosts, whether individuals or small and medium enterprises (SMEs),” she said.

Malaysian Tourism Agency Association (Mata) president Datuk Mohd Khalid Harun hopes the government could provide a specific allocation for training more local workers in the tourism sector to reduce dependence on foreign labour.

He said the local workforce served as the frontline and played a vital role in promoting the uniqueness of Malaysian culture.

In addition, Budget 2024 should also include a specific allocation for maintaining and upgrading infrastructure, such as airport facilities, public transport, and other basic facilities, to ensure that they are in the best condition.

“We are also proposing that the government provide additional funding for the local Islamic tourism sector to attract more tourists to Malaysia,” Mohd Khalid said.

— Bernama

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