Service tax exemption policy for inbound tours

KUALA LUMPUR: The Malaysian Association of Tour and Travel Agents (Matta) welcomes the Service Tax Policy issued by the Royal Malaysian Customs Department (RMCD) early this month.

Its president Datuk Tan Kok Liang said the decision came as a huge relief for tourism industry players as Matta had been pursuing up to the highest level to clear the confusion and impact of double taxation.

He said the decision was certainly timely as service tax exemption applied to inbound tour packages and tourism industry in gearing towards Visit Malaysia 2020.

“We are deeply grateful to Finance Minister Lim Guan Eng for taking interest in this matter and to RMCD officials for looking into our proposals.

“Making inbound tour package prices more competitive in the marketplace has a considerable impact on long-stay rural tourism and ecotourism packages. We applaud the government’s efforts in facilitating the growth of tourism in our country,” he said in a statement today.

The circular stated that from September, tourism management services would be among the four services no longer prescribed as taxable services under the First Schedule of the Service Tax Regulations 2018.

Businesses could issue an invoice without service tax for services provided up to August, or credit note if payment had not been received. Any service tax collected must be remitted to the RMCD and there would be no refund for service tax paid. – Bernama