How Malaysia's New Tourism Tax Will Affect Your Travel Plans

The new tourism tax went into affect this month and your vacation plans might be negatively affected. How? Read on to find out.

The government recently announced a new tourism tax that took effect on July 1, 2017
[UPDATE 11/07/2017] A much more recent news source has reported that the tourism tax will only be implemented from August 1st of this year, from the previously stated July 1st.
[UPDATE 27/07/2017] Another new announcement by the Ministry of Tourism and Culture has confirmed that Malaysians will not be subjected to the tourism tax and has decided only to impose this flat tax rate on foreign tourists. This means, any Malaysian or foreigner that opts for a hotel accommodation will soon be subject to additional tax, on top of the current Goods and Services Tax (GST).

Our article is originally meant for domestic tourists travelling within Malaysia, but now that this tax only affects foreign tourists, it means Malaysians won't be very much affected by this tax when they travel for holidays domestically. Still, we shall present the rest of the article as it was originally written for posterity.

A report by the Star stated that the new tourism tax will generate an income of RM654.62mil for the country even if hotel occupancy throughout the country is only at 60 percent. The additional income is going to be used for improving facilities in order to enhance the experience in the country as well as promoting Malaysia overseas.

How Much More Does This Cost?

According to FMT, there will be a fixed rate applied on a daily basis, depending on the type of accommodation you choose. The table below shows the breakdown of tax that you can expect to be charged for the accommodation that you pick for your next trip.

Type of Accommodation Tax Rate per Night (in RM)
Non-rated Hotels 2.50
Two Star Hotels 5.00
Three Star Hotels 10.00
Four Star Hotels 15.00
Five Star Hotels 20.00

In other words, if you intend to stay in a three-star hotel for seven nights, you will be charged an additional RM10 for each day adding RM70 to your original cost. If you are going with a family of four and booked two rooms for seven nights, you can expect to pay RM70 for each room, bringing your grand total of tourism tax to RM140. Despite it being called a tourism tax, business trips will not see any exemption from the fore mentioned tax making travelling cost even higher than before.

How to Save on Tourism Tax

The new policy will provide an exemption for small hotels with less than 10 rooms or privately operated homestay units. In order to save some money, you can book yourself a comfortable accommodation on platforms like Airbnb and save up to RM20 per day.

How to Get More Value From Your Trip

If you do not feel like contributing toward the tourism tax in Malaysia and find Airbnb not to your liking, you could always pick out a cheap flight and enjoy a holiday outside the country.

Read Also: How to Quit Your Job and Travel the World

Be that as it may, there are a number of countries like Thailand, Singapore and Indonesia which have also implemented a tourism tax.

Of course, whatever your choice may be, it will be wise to put all your purchases on a credit card that brings you more rewards and will contribute to your next trip or shopping spree.

Having the right credit cards could give you better deals on hotels, value dining experiences, or better cashback on overseas spending.

Depending on your needs, you can figure out what suits you best by using our comparison tool in our credit card section in order to pick out the best credit card that rewards you the most.

0 comments

Agree or disagree with this post? Questions? You also have your word!

  • kugan r

    so means if for business also I kena tax?

    Reply
    • RinggitPlus

      Unfortunately, yes. You can still save if you choose the right credit card to pay those travel expenses: https://ringgitplus.com/en/credit-card/
      Thanks for your question and we hope this helps!

      Reply
    • NOR

      They have publicized the issue but yet implemented to date. Any chance the government will retract this proposal?

      Reply
    • NOR

      6 July - locals won't be taxed for staying in 3 star hotels and below
      BTW, when is the actual implementation date?

      Reply
      • de.doughboy@gmail.com

        you forgot to mention that foreigners can apply for a GST refund at the airport tax rebate counter. I got mine back in Labuan.

        Reply
        • RinggitPlus

          You're right! That's a good point to remember when you need to save up on your travels

          Reply
        • YT Lai

          Registration for those subject to tourism tax start on 1 July 2017 and start collecting the tourism tax with effect 1 August 2017? There were appeals to defer. So have the effective date been gazetted or deferred?

          Reply
          • RinggitPlus

            Hi YT,

            The story about this tourism tax looks to be still ongoing and as far as we know it's still August 1.
            We'll be sure to cover the news if anything changes but this is all we know for now.

            Reply
          • Nor

            They forgot that people also travel to attend to the sick. The carers will become more sickly after after taking care of the sick, paying gst, paying income tax etc

            Reply
            • Nor

              Thus, all of us have to sit "diam-diam" at home and get burn out at work.

              Reply