Budget 2025: MTF Urges Tailored Investment for Malaysia’s Tourism Revitalization
KUALA LUMPUR, 16 October 2024: The Malaysian Tourism Federation (MTF) has called for an efficient and well-targeted allocation in the upcoming budget 2025 to rejuvenate the nation’s tourism sector. Emphasising the need for more than mere financial input into the Ministry of Tourism, Arts, and Culture Malaysia, the MTF is advocating for a strategic approach that addresses the industry’s immediate challenges and optimally channels funds and incentives to private stakeholders.
A Call for Strategic Funding Allocation
In statements made today, MTF President Datuk Tan Kok Liang emphasized the importance of accurately segmentalising tourism funding to enhance infrastructure, facilities, and products while supporting key stakeholders. “Funding needs to be segmentalised accurately and channelled expeditiously into tourism infrastructure and facilities, products, incentivising key stakeholders, support private sector-initiated events and upskilling the tourism workforce,” he stated.
Addressing Critical Industry Challenges
Tan highlighted an urgent need for the government to tackle perennial issues that have impeded the growth of Malaysia’s tourism landscape. He called for a complete overhaul of outdated tourism legislation and regulations. This includes resolving entertainment tax challenges, mitigating hikes in operational costs (particularly for manpower and utilities), and upgrading tourism vehicles. Additionally, he encouraged measures that promote domestic travel, such as tax reliefs.
“In order to ensure competition with regional and global tourism markets, a robust tax incentive framework is critical for stimulating development within the industry,” Tan continued. He cautioned against a one-size-fits-all approach to taxation, urging that a tailored framework is essential for the diverse needs of various stakeholders.
The Need for Enhanced Tax Incentives
Tan pointed out that Malaysia requires upscale hospitality facilities to attract high-end tourists. “For example, some locations in Malaysia need a category four to five-star hotel with international branding to attract high-end tourists and provide a better tourist experience. However, it is perplexing that tax incentives are only given to category one to three-star hotels," he remarked. This discrepancy, he argues, places Malaysia at a disadvantage compared to other prominent tourism destinations.
The MTF is urging policymakers to consider the proposals put forth by various industry associations, including the Malaysian Association of Hotels (MAH), the Malaysian Association of Tour and Travel Agents (MATTA), and the Malaysian Budget & Business Hotel Association (MyBHA). Hotel associations have called for investment incentives that can facilitate sustainable development in the hospitality sector.
Supporting Sustainable Development
While the government aims to achieve a sustainable tourism industry by 2030 through the National Tourism Policy, Tan is concerned that the existing incentives are insufficient for driving this transition. “We hope the upcoming budget will finally prioritise and allocate funding to support this crucial initiative,” he stated.
The traditional tax incentives outlined up to budget 2024—from hotel pioneer status eligibility to exemptions for certain events—need revisiting. These incentives should reflect the evolving business environment and be updated accordingly in budget 2025.
Inclusion of Diverse Stakeholders in Incentives
The MTF president raised his concerns about the exclusion of tax incentives for tour operators, particularly those facilitating domestic or international travel in Malaysia. Such incentives were withdrawn in the 2023 tax assessment year. “We urge the Ministry of Finance to reintroduce this incentive to support domestic travel; the tax savings may be utilised for marketing activities,” Tan urged.
To effectively position Malaysia as a premier travel destination amid growing expectations and changing travel behaviours, he reiterated the need for a well-coordinated government approach, supportive policies, and aggressive private sector initiatives.
Preparing for Visit Malaysia Year 2026
As the tourism industry brims with potential and challenges, Tan insists that the budget allocation for the upcoming year must be meticulously monitored by the Ministry of Finance, especially in preparation for Visit Malaysia Year 2026 (VMY 2026). He stressed the necessity for improvement in infrastructure and facilities, product development, diversified destination marketing, and rural tourism enhancement.
“Expanding digitalisation and human resource development are also crucial elements for driving tourism growth,” he concluded.
Your Voice Matters
The MTF’s strong appeal for targeted investment in Malaysia’s tourism sector underlines the vital role that carefully allocated resources can serve in revitalising a critical component of the economy. The community, innovators, and stakeholders are urged to engage and respond, as continuous input from varied perspectives can further enrich these discussions.
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For related insights on tourism development strategies, visit MTF’s official site and explore articles on market trends and governmental policies.
This article aims to provide informative coverage for stakeholders, travel enthusiasts, and industry professionals keen on the future of Malaysia’s tourism landscape.
