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BUDGET 2023 BEING SEEN TO BE UNABLE TO PROVIDE A POSITIVE LONG-TERM EFFECT TOWARDS THE RECOVERY OF THE HOTEL INDUSTRY AND NEEDS A SPECIAL INDUSTRY BUDGET TO BE DRAFTED

We would like to thank the Malaysian government for recognising that the tourism sector has been severely impacted by the COVID-19 pandemic and has yet to reflect the achievements made prior to the COVID-19 pandemic, as well as for introducing several key initiatives during the announcement of the 2023 budget on October 7, 2022. We have frequently described the concerns that the Malaysian Government should prioritise in crafting the 2023 budget, and we hope that the Malaysian Government would consider assisting the hotel industry in surviving and gradually recovering in the next years.

However, we think that the 2023 budget cannot have a positive long-term effect towards the recovery efforts for the Hotel Industry.

In 2023, the Government has targeted the arrival of more than 15 million foreign tourists with an income value of 47.6 billion ringgit. However, in restoring the capability of the Hotel Industry, the Malaysian Government should be able to introduce a budget that is more effective in solving the threats to the Industry as well as recovering the taxes that have been lost or revenue leakage due to failure to take early action against the threats to the Hotel Industry due to the absence of specific laws to regulate :

a. short-Term Residential Accommodations (STRA).
b. all types of Online Travel Agencies (OTA’s).

We are also disappointed when there is no change in efforts to raise the Annual Threshold Value of the Service Tax (SST) for the Hotel Industry from RM 500,000.00 to RM 1,500,000.00 where Budget Hotel is an industry used by the B40 Group and also did not introduced any kind of Taxs Incentive for Domestic Tourists which aims to mobilize or encourage people to travel within the country in re-stimulating the Tourism and Hotel Industry. It will not have the maximum effect for the recovery of the Industry when the arrival of foreign tourists is still low and Malaysians chooses to travel abroad.

In general, the 2023 budget can be drafted better for the sustainability of the Hotel Industry in realizing the recovery of the Industry as well as introducing initiatives to resolve all threats for the Hotel Industry in addition to be more attentive to the Hotel and Tourism Industry that has been affected before the spread of the Covid-19 panmdemic in Malaysia as well as the current condition of the world economy and it will take a long time to recover as a result of various economic factors that directly affect domestic and foreign tourists including hotel industry operators.

EXTEND THE TEMPORARY MEASURES FOR REDUCING THE IMPACT OF CORONAVIRUS DISEASE 2019 (COVID19) ACT 2020 [ACT 829]

We would also like to request the Malaysian Government to extend the Enforcement of the Temporary Measures For Reducing The Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 [Act 829] to provide special protection to those in the Hotel and Tourism Industry from Banking or Financial Institutions , property owners and also allow them to postpone the execution of the contract as mentioned in the “Table of Section 7 – List of Contract Categories” of Act 829.

“A STRONG INDUSTRY ECONOMIC FOUNDATION IS THE BEST SHIELD FOR THE SUSTAINABILITY OF THE HOTEL INDUSTRY”

For and on behalf of
The Malaysia Budget & Business Hotel Association (MyBHA)

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