PRESS RELEASE ON “NATIONAL BUDGET 2022 MUST FOCUS ON REHABILITATING TOURISM BUSINESSES, STIMULATE DOMESTIC TRAVEL DEMAND AND REVIEW TRAVEL RESTRICTIONS FOR A SWIFT RECOVERY” SAYS MATTA
Kuala Lumpur 20 October : The Malaysian Association of Tour and Travel Agents (MATTA) welcomes the recent statement by the Minister of Finance Datuk Seri Tengku Zafrul that the budget 2022 will focus on the tourism sector which had been badly affected by the COVID-19 pandemic. The Minister of Tourism, Arts and Culture had reported that the whole tourism industry lost more than RM 135billion in 2020, and for 2021, it is expected the loss to be more than RM 165billion.
Towards this, MATTA hopes that the budget will be “generous” towards the tourism industry with specific and targeted assistance especially for the tour operators and travel agencies who have been a main contributor and catalyst to the development of the tourism industry.
“Rehabilitating tourism businesses involve providing soft loans for the companies to rebuilt an infrastructure that have collapsed, staff retention, retraining and providing support to meet consumers expectations and its competiveness as a preferred destination in this region”.
“Due the pandemic, current tourism strategies will be local before global. As such Budget 2022 should focus on providing travel stimulus packages and tax incentives for personal and corporate travel “. Given the limitations of domestic tourism, the government must fast-track framework and travel solutions to expedite opening the border for international tourists”.
“After waiting for 20 months while seeing other countries successfully containing COVID -19 and reviving their tourism industry, Malaysian tourism players are eager to get started and look forward to smart public-private partnership initiatives”
MATTA President, Datuk Tan Kok Liang said that MATTA had submitted to the Ministry of Finance our proposals and wish list for the National Budget 2022 to urgently help a critically injured economic sector and the stakeholders involved in it.
REHABILITATE BUSINESS
1. MATTA had urged the Ministry of Finance to set up a “Tourism Recovery & Growth Fund” to provide financial support to all stakeholders and private sector companies in the tourism industry to restart, revive, sustain and grow their respective sectors now and into the future. The Fund to provide at least RM 5billion for a start, as a soft loan facility, with 1% interest and repayment period of 7 years. The soft loan is to have easy terms for application and fast-track approval for the companies to restart and rebuild their business for promotion, marketing and selling their holiday packages.
DOMESTIC TRAVEL STIMULUS
2. To revive the “Domestic Travel Stimulus Program” for the consumers to buy subsidized domestic holidays from licensed travel agencies / tour operators. The Program to start with at least RM500 million in its Fund to help revive, re-stimulate, and revitalise domestic travel and holiday- making by the consumers at a subsidized price and also providing business back to the travel agencies / tour operators.
SUSTAINING WORK FORCE
3. Extension of wage subsidy programs from 1 October 2021 to 31 March 2022 while waiting for international tourists arrivals into Malaysia.
BOOSTING DOMESTIC DEMAND, LEISURE BEFORE BUSINESS TRAVEL
4. Currently, a personal tax relief RM1000 (effective tax savings RM210 based on average tax bracket of 21%) per person per year is extended for domestic travel. MATTA proposed to extend tax relief till 2025 and increase the amount to RM 8,000 per person eligible for income tax relief for the amount spent on domestic holidays and travel within the country. This support will incentivise the consumers to travel for holidays within the country, which must be bought from licensed travel agencies / tour operators.
For corporate companies carrying out incentive trips / holidays for their staff within the country, the companies to be allowed for double deduction from income taxes for the amount spent on such incentive trips / holidays.
SUPPORTING BUMIPUTERA AGENCIES
5. As another step to further help revive travel and business for travel agencies / tour operators, it is proposed that the income tax exemption of RM 8,000 is also allowed for Malaysians to travel for their umrah pilgrimage to fulfil their religious obligations, which must be bought from licensed travel agencies / tour operators that are permitted to sell such umrah travel package.
PREPARING FOR INTERNATIONAL ARRIVALS
6. MATTA had urged the government that the revival of the Tourism Industry needs a clear strategic Roadmap for the Reopening of International Borders. While domestic travel is important, it is insufficient to sustain the tourism industry overall. International borders must be reopened soonest with set regulations and travel safe protocol as we move into the endemic period as we learn to live with the virus.
FUNDING FOR INTERNATIONAL BRANDING
7. MATTA had urged the Ministry of Finance to provide a sufficient budget for the government agency concerned and travel related Associations to carry out more aggressive promotion and marketing internationally to market Malaysia as a safe and viable tourism destination. We must act fast and decisively to rebuild our country as a tourist preferred destination as we are competing with neighbouring countries for the same market share of tourists and tourism dollars.
“We wish to reiterate the Ministry of Finance needs to provide practical financial assistance beyond tax incentives, or tax rebates or deferment of tax instalments for tourism companies. Simply because we are unable to benefit as we have accumulated business losses in 2020 and 2021. By now, we have more than sufficient tax losses to offset any “so called future profits”.
The Malaysian travel and tourism industry is one of the sectors most critically affected by the Covid pandemic since it first began in March 2020. In 2019, the travel and tourism industry were the third largest economic sector in the country (after manufacturing and commodities) generating more than RM 89 billion with 26 million international tourist arrivals to the country. The revenue of RM 89 billion in 2019 was higher than revenue from the export of palm oil at RM70billion and rubber gloves at RM22billion.
The whole tourism industry employed about 3.6 million people and the travel agencies/tour operators’ sector alone employed more than 100,000 people. When the pandemic hit the industry, many tourism workers were laid off as companies went into hibernation or even closed completely.
“We look forward to the government commitment through the National Budget 2022 to revive the tourism sector” concluded Tan.
DATUK TAN KOK LIANG PGDK, M.A Tourism, CA (M), FCTIM, CHA
President MATTA
Term 2019 – 2021