Hotel group says Budget 2024 service tax hike adds speed bump to hospitality industry recovery
KUALA LUMPUR, Oct 13 — The Malaysia Budget and Business Hotel Association (MYBHA) has criticised the government’s proposal to increase the service tax from 6 to 8 per cent under Budget 2024.
The association said the planned increase was also on top of the absence of specific measures within Budget 2024 to support the local tourism sector.
“We regret and find that the 2024 Budget cannot have a positive long-term effect on the recovery efforts of the hospitality industry and will even force an increase in sales prices if the service tax is increased from 6 per cent to 8 per cent without raising the threshold value of the service tax for the hospitality industry.
“We are also disappointed when there is no effort to raise the annual threshold value of Service Tax (SST) for the Hotel Industry from RM500,000 to RM1.5 million which budget hotel is an industry used by the B40 Group which has been voiced for a long time,” the statement said.
MYBHA said the government should have used the federal spending plan to address problems facing the hospitality industry and help its recovery that would then generate added revenue for the country.
This included enacting specific laws to regulate short-term residential accommodation (STRA) and all categories of online travel agencies (OTA) that have encroached upon formally licensed hotels, it said.
Such measures were vital to ensure the success of Visit Malaysia Year 2026, and the recovery of the local hotel sector between now and then, the group said.
