Malaysian trade responds to zero-rated GST

01 Jun 2018 2079 | World Travel News

An industry hopeful of the benefits that Malaysia’s latest tax changes will bring is reacting in different ways, as the zero-rated goods and services tax (GST) policy kicks into place starting today until August 31, after which it will be replaced by the sales and services tax (SST) from September 1.

Some inbound agents are proactively working to reflect the new zero-rated GST in their contract rates, and others still awaiting more concrete details about the upcoming SST.

Hotels are in the midst of preparing new contract rates due to the zero-rated GST

Ally Bhoonee, executive director of World Avenues, said: “A majority of hotels have not given us new contract rates. Not all hotels are revising rates as some hotels had been absorbing the six per cent GST and giving us nett contract rates since the introduction of the GST in 2015.

“Another headache is that hotels that impose the six per cent GST have their own formula for calculating it. It is not a standard formula.”

Updating rates has been a “labour intensive” process at World Avenues, Ally said. The agency has hired two workers to contact hotels individually for the new contract rates and update its online booking system manually, in addition to processing GST refunds to partners overseas for hotel and tour bookings made from June 1 to August 31.