Budget 2020: Malaysia Makes Tax Exemptions for Tourism
The Malaysian government has a new strategy. And that is the tax exemption and incentive strategy, which is geared towards the tourism sector of the nation. Tax Exemptions for Tourism is a bold effort to boost the presence of tourists in Malaysia.
Budget 2020 budget will offer tax incentives to companies that want to invest in tourism businesses. These include theme parks and organisers of international cultural and sports programmes.
Thanks to the tax exemptions for tourism, new investments in international theme park projects will be given income tax exemption of 100%. Also, it includes the Investment Tax Allowance of 100% to be set off against 70% for five years.
Tax Exemption for Tourism
The government will allocate a total of RM1.1 billion to the Tourism, Arts, and Culture Ministry. This money is meant to promote relevant programs that support the Visit Malaysia 2020 plan.
The government will continue to allocate 50 percent of tourism tax to respective state governments to support their efforts in conjunction with VMY2020. Also, the government will allocate a substantial portion of the departure levy collected for tourism infrastructure projects.
Also, in conjunction with the same movement, the Malaysian government is giving a 50% excise duty reduction for any vehicles made within Malaysia. This would only be for tour operations vehicles.
The Cultural Economy Development Agency (CENDANA) will not be left out of this movement. The government awards a budget of RM5 million to support only art exhibitions and visual art galleries.
It is not just mainstream tourism that is trying to grow; the Malaysian medical tourism is also getting a big boost. The Year of Healthcare Travel 2020 program would be expanded to the growing base of medical tourism in the area.
Medical tourism is a rapidly expanding industry in Malaysia, growing 17 percent annually from 2015 until 2018. In 2018, it generated RM1.5 billion revenue receipts from 1.2 million healthcare travellers.
To further support the Malaysian Healthcare Tourism Council, it will receive RM25 million to revamp their services. This is to help Malaysia become the next best stop for medical tourists in entire Asia.
Tax Exemptions for Support of Arts and Culture
The tax exemptions for tourism would also be extended to businesses that support arts and cultural activities in the country. This is to encourage other businesses to take notice of and support the cultural scene. In doing so, these activities help bring invaluable foreign income from tourists eager to experience the local culture. Companies that support arts and cultural activities will receive tax incentives in the form of income tax exemption. The tax deductions given to companies sponsoring arts, cultural and heritage activities in Malaysia will increase from RM700,000 to RM1,000,000 per year.