THE tourism tax is a constitutional matter now because tourism is under the purview of the state and local governments, said a Sabah assemblyman.
Dr Jeffrey Kitingan said Putrajaya’s move to introduce a tourism tax, which comes into effect on July 1, may be “legal” but tourism falls under the ambit of residual power vested with the state government.
Tourism was not specifically discussed in the formation of Malaysia, but it was added as a new item 25A to the federal list in the Ninth Schedule in 1994.
“Its inclusion may be unlawful although it may be passed in Parliament in 1994 with the participation of MPs from both Sabah and Sarawak.
“The federal government has no business to amend the federal constitution and usurp the residual power of the state on tourism,” said Kitingan, adding that tourism was never provided for in 1963.
The Sabah STAR president and Bingkor assemblyman has raised a number of controversial matters on the Malaysia Agreement and Sabah’s 20-point agreement.
He said the tourism tax mechanism of charging guests a fixed rate and the existing practice of local governments collecting a levy from hotels will overlap.
The Sabah government also collects RM40 to RM140 a month from hotels based on occupancy.
Parti Cinta Sabah information chief Ramli Idang was quoted by the Daily Express as saying yesterday that the overlap is a clear case of double taxation and thus, illegal.
Besides, any new tax should also gain the approval of the state government as enshrined in the Sabah constitution.
On September 9, 2016, the state cabinet rejected the hospitality levy proposed by Tourism and Culture Minister Nazri Abdul Aziz.
Ramli said a tourism tax will have a big impact on Sabah which is heavily dependent on the industry and it is the sole sector dominated by locals compared with plantations and construction.