Malaysia Is Introducing A New Hotel Tax

Filed Under: Hotels, Travel

The Ministry of Finance and the Royal Malaysian Customs Department has announced today that they’re introducing a new tourism tax, which will come in the form of an additional nightly fee on all hotel stays. This will go into effect as of August 1, 2017, and will be in addition to the taxes and fees normally charged by hotels in Malaysia, which typically include a 6% tax and 10% service charge.

Petronas Towers, Kuala Lumpur

The new tax will be based on the class of hotel you stay at, as follows:

  • five star: RM20/room/night
  • four star: RM10/room/night
  • one, two and three star: RM5/room/night
  • one, two and three Orchid: RM2.50/room/night
  • non-rated accommodation premises: RM2.50/room/night

So staying at a 5-star hotel will incur a ~5USD nightly tax, a 4-star hotel will incur a ~2.50USD nightly tax, etc.

A stay at the St. Regis Kuala Lumpur would incur a 20RM per night tax

This tax applies to foreigners and nationals alike, and applies regardless of the purpose of your visit. Here are the reasons that the government gives for imposing this tax:

  • It is a mechanism of cooperation between the Government and the industry to enhance tourism experience for tourists.
  • ​The returns will be used to develop the tourism industry, namely the enhancement of tourism infrastructure and facilities, as well as tourism promotional activities and campaigns for the country.
  • To be used to protect, preserve and conserve Mother Nature, culture and heritage for the benefit of not just the present generation but also the future generation.

While this new tax isn’t huge, hotels in Malaysia are typically reasonably priced to begin with, so as a percentage this new tax isn’t insignificant. I’ll be curious to see how much these taxes actually go towards promoting tourism infrastructure and facilities, rather than just being a way to boost revenue for the government.

(Tip of the hat to LoyaltyLobby)

  1. The worst for this is India where there is up to 25-33% in taxes because the taxes are based on the official rack rate of the hotel room rather than the actual rate… it just seems like a f***-y** to tourists

  2. This strikes me as a pure revenue raising exercise for the Malaysian government. A tax isn’t ‘a mechanism for cooperation’…

    And a country that produces so much palm oil doesn’t have much street cred on their third point.

  3. In the US most cities have 3 or 4 different taxes tacked onto the hotel cost. Most of these extra taxes pay for stadiums and other projects and people staying pay the tab. It’s no different. As a matter of fact some US cities the taxes can be over 35% when added up of room rate.

  4. OMG.. another way to fill the pockets of the government, most probably to subsidize their own travel staying at 5 star hotels both domestic and international. This is crazy already with the different taxes and the GST introduced.

  5. Lucky, it’s not 20RMB..that’s referring to Chinese Yuan. We use RM20.00 instead. It stands for Ringgit Malaysia hence RM

  6. “A stay at the St. Regis Kuala Lumpur would incur a 20RMB per night tax’ thought RMB is different from RM..?

  7. Hmmm…. raising tax means their state income is getting desperate. And honestly, malaysia is not as big as singapore, indonesia or even thailand in tourism sector or natural reserve…..

  8. Have you checked out the taxes on rooms in Seattle?

    Courtyard Seattle. Courtyard!

    1 night , Marriott Rewards Member Rate 342.00
    Estimated government taxes and fees 55.35
    Total for stay (per room) 397.35

  9. I am a Malaysian and to be in all honesty, our government is bankrupt already under the present administration. There is tax left right centre down to everything that you see. With the trouble of mismanagement of funds by the number 1 in the government, one may wonder where is the country heading to next. You need to ask any of your friends living in this country to understand the entire situation.

    It may seem like mere peanuts to those with spending powers but to many locals, staying in a hotel will soon be a luxury once again. It will no longer be affordable.

    Where do you think it will head? Airbnb will grow in the metropolitan of Kuala Lumpur and I foresee that it will grow in other parts of Malaysia. Though it might not be big but it will definitely be bigger than the current market in Malaysia.

  10. “It is a mechanism of cooperation between the Government and the industry to enhance tourism experience for tourists.”

    Yes! Nothing says enhanced tourist experience more than extra taxes tacked on to a hotel bill! They must be hiring Frequent Flier executives from US airlines…

  11. Hotel rates in Kuala Lumpur is very reasonable compared to other large cities in Asia so the tax won’t really be much of an issue. You should see hotel taxes in nyc, ny state tax, ny city tax, transport tax, hotel occupancy tax and then whatever else fee they want.

  12. Thats honestly nothing compared to what some US hotels charge per hotel stay in government fees & what some airlines charge for fuel…Im still wanting to visit Malaysia!

  13. Well I guess this was soon to come. Im currently staying in the St Regis KL and there are plenty of government and royals staying here so I hope this applies to everyone…. Where the money goes is another story. Infrastructure is always being developed here so maybe there are avenues that they want to subsidize it with.


  14. THe Malaysian Minister of Tourism now says that the taxation will begin on 1st July 2017, instead of 1st August.

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