Tax Relief

The tourism sector urgently wants tax breaks and authorities grants

KUALA LUMPUR (May 30): With no tourism revenue and highly indebted agencies, the Malaysian Association of Travel and Travel Agencies (MATTA) is calling on the government to provide some form of tax break to help ease the financial burden of about 3,000 of its members.

“Any form of tax break would be welcomed as the travel and tourism sector receives very little financial support,” said Nigel Wong, Honorary Secretary General of MATTA, emphasizing that around 90% of the 47,000 people employed in the industry are left unemployed.

He said this when drafting MATTA’s proposal for the government to present a tourism recovery roadmap during Bernama TV’s Midday Update last week.

MATTA also wants the extension of the moratorium on loans from banks to include leasing companies, as most buses and vans used by travel and tour companies have been bought by leasing companies, he said.

Wong said it has been financially difficult to maintain the fleet of transportation vehicles such as buses and vans since the Covid-19 pandemic struck last year and brought businesses to a standstill.

“Our estimates – based on our survey of 3,000 MATTA members alone – show that we are looking at almost 9,000, if not more than 9,000 vehicles (excursion buses) classified as ‘Bas Persiaran’.

“To put it in context, a 40-seat tour bus can cost anywhere from 490,000 to 580,000 RM, which means the lease and loan payments could be exorbitant, especially during the current slowdown,” he said.

In the midst of such difficult circumstances, MATTA is pushing for targeted initiatives to reduce financial strain and expenses while helping the sector maintain its talent pool and keep the industry going for better days.

“Based on our survey of our 3,000 members, travel agencies alone employed more than 47,000 people, but the official number is much higher as not all travel agencies are MATTA members.

“At this point, we estimate that more than 90 percent of this workforce has either been laid off or taken on unpaid leave,” he said, noting that the number may include non-professional professionals such as tour guides and contract workers who also work closely with travel agents .

Wong also called for the government to relax travel and travel company regulations by lowering the Employees Provident Fund (EPF) contributions for a period and exempting Human Resource Development (HRDF) payments.

On the tax break, he said in 2020 that MATTA had asked the government to cut tax on profits made in 2019 in order to boost cash flow for the challenges ahead.

“Well, without tourism income and with many indebted agencies burdened with rent, lease and loan payments, any form of tax relief in the 2022 budget would be welcome.

“Right now, the tourism sector has been in limbo since the beginning of the pandemic where hotels are inactive or rather ‘hibernating’, which is an understatement given the ongoing lockdown,” he said.

When asked if consolidation and mergers could be the way for travel and travel companies to weather the challenging times, he said MATTA had put the idea to its members.

“They can strategically combine their resources not only to survive but maybe even to thrive if business picks up again in the future,” he said.

Regarding retraining, he said travel agent workers are a talented bunch who are able to adapt and learn quickly due to the complex and ever-changing environment of the industry.

Wong said during this difficult time, the government should provide funds for travel agent employees to acquire new technology and language skills.

The funds could also be made available to tourism professionals seeking professional certifications in the industry, such as degrees and masters in tourism, he said, adding that he also knows of travel agents venturing into digital space and offering online services .

The industry is also preparing MATTA members to be empowered and digitally savvy so that as the borders gradually reopen, more members will be prepared, Wong said.

As a clear picture of the industry’s extreme hardship, he cited a case where the owner of a travel agent is now doing manual construction work in order to survive.

Wong added that MATTA is working very hard for the government to take targeted initiatives to help those affected and revitalize Malaysia’s tourism sector, which has been a major source of income for the national coffers.

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