Sarawak will not implement the federal tourism tax next month despite a previous announcement by Putrajaya, said Chief Minister Datuk Amar Abang Johari Openg.
He said this was because the implementation in the state was not finalised,
“Negotiations between the state and federal governments on the methodology are ongoing,” he said to reporters at his Hari Raya Open House at the Borneo Convention Centre Kuching (BCCK).
He also said the implementation of the tax will breach the forward booking contracts between the hoteliers and foreign tourists, which he said did not previously include the new tax.
The chief minister also insisted that while the federal government was empowered to introduce new taxes, tourism remained under the jurisdiction of the individual states.
“But tourism is a state’s right and here we are talking about our residual power,” he said, adding that this was why his administration wanted the collections from the state to be remitted back.
Abang Johari said he had discussed with Prime Minister Datuk Seri Najib Razak on Sarawak’s rights as enshrined in the Malaysia Agreement and the Federal and State Constitutions.
“As the chief minister, I will definitely be defending our rights and tourism in one of them,” he said.
Abang Johari said after his discussions with the PM, it was agreed that hotels rated three stars and below will not be subject to tax.
However, RM15 tax for four-star and RM20 tax for five-star hotels will remain.