Malaysians holidaying in the country can heave a sigh of relief as they will not be hit by the new tourism tax. This came after the Government decided to only impose the tax on foreign tourists at a flat rate of RM10.

Tourism and Culture Minister Datuk Seri Mohamed Nazri Abdul Aziz told Parliament yesterday that the tax, which is expected to take effect from Aug 1, would apply to all hotel categories and be charged per room per night.

However, it will not be applicable for premises with five rooms or less, homestays and village stay.

Nazri also said the Prime Minister would decide whether to push back the implementation date to beyond Aug 1.

Initially, locals were only supposed to be exempted if they stayed at hotels rated three stars and below, while foreigners were to be charged between RM2.50 and RM20 per night depending on the hotel's rating.

The decision to exempt locals, said industry players, would benefit and enhance domestic tourism.

Malaysian Association of Tour and Travel Agents (MATTA) president Datuk Tan Kok Liang said the exemption would stabilise the local tourism sector.

"MATTA has expressed concern over the tourism tax and we are glad that the Government has taken note" said Tan.

"Also, reducing the tax from RM20 for four- and five-star hotels to RM10 will minimise the adverse impact on the high-end industry.”

He also said there would be minimal impact on foreign tourists, adding that the extra funds collected would be spent on tourism infrastructure development.